I hope you’re following along as we countdown the final 100 days of 2022 - you can join us anytime. Learn more about the program HERE.

Hopefully, you did the work from Day 93 – Building A Budget. It’s time to see where things stand relative to your monthly income.

Step 1. Add up your monthly take-home pay, from all sources. Include any part-time jobs or side hustles.

Step 2. Subtract all of your monthly expenses from the total take-home pay. The remaining amount is your monthly residual income. This is also sometimes referred to as disposable income. I prefer residual because I don’t think anyone should think of their income as something that you can throw away or dispose of. Just a personal mindset for me!

Step 3. If the remaining amount of residual income is not as big as you’d hoped, or even a negative number, don’t panic. The budget you worked through is very inclusive, hopefully taking everything into account. Ideally, there is still money left over. If not, it’s obviously time to make some hard choices.

Grab your notebook!

First, the good news. At least now you know. While it can be upsetting or frustrating to have expenses outnumber your income, understanding where you are is key. And…while it might not provide a lot of comforts, the vast majority of people have been there at one time or another. Many still are.

Based on the amount of money you are off on your budget; it’s time to determine evaluate your expenses and determine what is truly necessary. This will take some discipline and fortitude. While none of us want to upset our current lifestyle, it is never a good idea to spend money you don’t have, especially if that lifestyle is financed on credit cards.

Last week, Fed Chairman Jerome Powell once again increased interest rates. The reciprocal effect could impact the cost of credit extended to you. Said another way, as the federal funds rate and the prime rate have increased, so too will the Annual Percentage Rate (APR) on your credit card. Credit card issuers charge an amount over and above the prime rate, often 10% to 20% over. As prime goes up, that percentage will increase the cost to you. While it could take a month or two of billing cycles to see the full impact, rest assured, credit card issuers do not absorb that additional expense, consumers do.

So here are a few questions to get you started:

• Are there services I can bundle to get a discount? Internet, cable, TV subscriptions.

• Do I really need all the streaming subscriptions, like Disney+, Hulu, Netflix, Paramount+, or can I get by with one of them?

• Cut back on costly coffee. If you stop for coffee every workday and spend $6 on average for that coffee, you’re spending $1,560 on lattes. The cost of a Keurig Café Special Edition is less than $165 and it makes amazing lattes and cappuccinos. Most retailers offer a large array of K-Cup choices including lots of seasonal favorites.

• Reduced interest rates or 0% APR offers on credit cards. Now’s the time to review offers on credit cards that offer reduced rates for introductory periods. Read the fine print. Make sure you understand the terms as there will be charges for transferring balances over. Further, there can be costly penalties if certain payments are not made according to the provisions.

• Acorns. If you’re not yet familiar with Acorns Investing, check them out. Connected to your bank account, Acorns rounds up your debit card purchases, sweeping the spare change into an account. They invest those funds for you to grow your earnings. My husband signed up a couple of years ago and he’s built up a nice little nest egg that he wouldn’t have otherwise had, putting spare change to work. Check them out at www.acorns.com/signup.

• Vacation & holiday accounts. While we’re talking about saving, set up savings accounts for vacations and holiday spending. Most banks offer savings accounts with little to no fees if they have minimal withdrawals per month. Set up monthly transfers from your take-home pay to automatically go into these accounts, every pay period. Even if you start out with as little as $5 per paycheck. This type of savings provides a budget of what you then have available to spend without putting vacations or Christmas gifts on high-interest credit cards.

Hopefully, these ideas give you a few things to consider when evaluating your spending. The important takeaway is to do something about it now. If you are overextended on spending, you can’t afford to wait.

How creative did you get to cut back on your expenses? Share one thing that really helped you save some money.