Stress Testing Your Budget: How to Stay Strong in Tough Times

Money can be stressful. From earning to managing to spending, money consumes a large part of our lives and can even define how we feel about ourselves and how others view us, and that is during good economic times.

When times turn tough, any little cracks in our money handling run the risk of becoming giant, gaping fissures that suck our money and our life, or at least our peace and happiness, down through it.

The smart thing to do is stress test your budget when things are going relatively well as opposed to when things turn south. This way you can make changes based on what works now and in the future as opposed to just what it takes to try and survive this very moment.

Stress Testing

The core to any budget overhaul is comfortably reducing spending by adjusting your lifestyle gradually. Look for ways to reduce your monthly outlay in every area of your life.

  • Rent/Mortgage – This is probably the hardest to save on since it requires moving to a new place and possibly selling your old one. That also makes it one of the biggest chances to stress proof your budget. Do you really need all the space? Can you live somewhere that is not quite as nice or in a little less desirable neighborhood? An alternative to moving is to refinance your home loan, when interest rates are going down this is a good option. The potential here is to cut several hundred dollars off your monthly budget.
  • Utilities – I’m not talking about turning lights off when you leave the room or sticking a jug of water in your toilet tank to use less water per flush, although that probably wouldn’t hurt. What I mean here is cable, internet, and phone service.
    • Cable – 200 channels? Really? Can you watch even a quarter of those? Dump the gazillion pay channels and stick to a basic tier, or even cancel the whole thing. Reading, conversation, music, exercise – there are many free ways to occupy your spare time that are more beneficial anyway
    • Internet – Cut it back to the lowest speed offered. I’m not going all dial-up on you here, but the slowest broad band speed will suffice for most people.
    • Cell phone – cut back on the minutes, even if it means joining one of those goofy plans that allows unlimited calling to select numbers, because most of us use the vast majority of our cell minutes calling a few people.
    • Home phone – get rid of it altogether and join the cellular revolution. It’s not just for the young and hip anymore.
  • Food – Stop eating out as much. Get used to preparing meals ahead of time for those nights when life has been hectic. Coupons are nice, but making eating in a habit will do more for your budget in the long run.
  • Insurance – Be a ruthless negotiator for things like health insurance (if you have to purchase your own) and car insurance. Shop around twice a year and don’t be afraid to negotiate with several different insurers. Savings here can easily add up to hundreds of dollars a year.
  • Cars – Learn to be content driving your car past the pay-off date and buy a used car when you finally do trade it in. No car payment can go a long way to stress proofing a budget.


I cannot stress enough the importance of having zero debt when it comes to stress proofing your budget. When the wolf starts knocking on your door, you will most likely have to make a decision between food and shelter or paying your credit cards, and this can be a gut-wrenching decision to make.

Use the upsurge in disposable income that you will have from methodically reducing your budget to pay down your credit cards at an accelerated rate. Consider using ‘found’ money to do this as well. Many people receive cash gifts for various holidays or stumble upon some rebate or other source of cash. Instead of just blowing it on yourself, consider paying down debt with it and really blowing it on yourself.

If you find it hard to free up cash to accelerate the debt repayment, consider a consolidation loan to help lower your monthly payment and use the balance to pay down the loan. Just be careful not to incur more debt on the credit cards you just paid off or you could wind up with a lot of stress, even in the good times.

Stress testing your budget shouldn’t be about cutting your expenses to the bare bones. Life should be fun and you should live a little. The goal of stress testing your budget is to adjust your lifestyle to the point that when tough times come knocking, you are already comfortably living a lifestyle that allows you to stay strong and not have to go looking for ways to survive today that may be detrimental to tomorrow.

This guest post was written by Jonathan over at Debt Loans.

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