Definition
When you spend more money than you earn in a given period. It means you’re running short on funds and may need to cut costs or find extra income.
What to consider
- When your spending outpaces your income, it’s a clear signal to reassess your budget.
- Look for areas where small cuts could make a big difference.
- A consistent deficit might mean exploring extra income sources.
Real world scenarios
- Chase tallies expenses and realizes he’s $100 short every month, pushing him to cut subscriptions and reduce dining out.
- Kelly notices her electric bill soared in summer, leading to a shortfall in her budget. She makes up the difference by temporarily suspending her streaming services.
- Frequent deficits prompt Franco to look for a part-time job or negotiate a raise to boost monthly income.
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