The 5 R's for Smarter Budgeting 

Now it’s time to follow the 5 R’s: RELAX, REVIEW, REORDER, RESOLVE, then RE-EVALUATE.


When your mind is stressed about finances, we go into fight or flight mode. During this stress response, your heart rate increases, breathing quickens, muscles tighten, and blood pressure rises. Some of the cognitive effects of these physical reactions include disorganization, inability to focus, and poor judgment. We want you to go into your financial decision making mode with a calm body and mind. Take 3 DEEP breaths. Hold your palm on your belly and breathe in for 5 seconds, feeling your belly expand. Hold it at the top for 5 seconds. Breathe out for 5 seconds.


Take a look at the information you gathered about your expenses. Break annual expenses down to monthly amount then write down all of your monthly expenses. Include anything with a due date as well as necessities such as food and gasoline and electricity. Compare that to the amount of money that you take home to see your current cash flow.


Most financial gurus are going to tell you to look at the basics- Keep a roof over your head, food on your table, and clothes on your back. I would also suggest that electricity and running water is fairly vital but those companies do have plans in place to help clients with reduced income, so give them a call.

Ask yourself -What is going to create a serious hardship if you don’t pay this month?


Follow your list and pay what you can with the income that you have, starting with the most important at the top of the list. You have a finite amount of money to spend so make sure that you are spending deliberately according to the plan that you created based on your needs. That may mean that you can’t pay your creditors. That may be your reality. That’s ok. I do recommend that you stay in contact with  your creditors and let them know your situation and what you are trying to do to get back on track. Ask about their hardship services; many can offer interest only payments or defer your payment for 90 days. BE CAUTIOUS HERE- Unscrupulous credit companies will try and guilt you into paying them- it’s only $25, it’s only $40 but that’s $40 of food, $40 for your SDG&E, $40 for gas to get to an interview, if needed. Stay firm to your priority list.


You still have your list. Do the same 5 steps each time that you get income because some things may change their priority in the following month. Maybe you are going back to work and can pay some back bills or increase your grocery budget. Maybe you have a cell phone bill that gave you a month but now they are threatening to cancel your phone but your water company is giving you another 30 days. Re-evaluate your priorities based on due dates and grace periods and ending forbearances.

Remember that Cal Coast is here to help. We have a Certified Financial Coaching team that can help you with these 5 R’s as a free benefit of membership. Call now: 877-495-1600 or schedule an appointment online today.

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