I was talking to a friend when I realized she is in the same financial jam as a lot of folks. She and her husband have not been watching their finances very closely and now one of them may lose their job. She is overwhelmed.

If you are squeezed financially, where do you start?

First, take a deep breath, step back and look at the big picture. How dire is your situation? How strong is your safety net? What factors do you have control over? It may not be as bad as you think.

But it will take time to remedy. I’m not going to recommend you devote your entire weekend to your finances, although that would earn you a gold star… …Instead, here are two approaches that require much less time.

If you have two hours: create a budget. That means tracking down every penny you spent last month, grouped by category (housing, take out, gasoline, groceries, etc.). Not much fun, but keep your eyes on the prize – financial freedom.

If you think you have nailed down everything, check if you included gifts, medical expenses, utilities, and subscriptions. For irregular expenses, like insurance, vacations, and medical care, divide last year’s total spending in these categories by 12. Create a category for irregular expenses in your monthly budget and put that amount aside every month. When an irregular expenses comes up, you have the moolah.

Look at where you are spending money and chose two to three areas where you want to cut back. For the first month, try to spend 10 to 15 percent less in these categories.

If you have thirty minutes: call your insurance broker(s) and ask them for a better rate.  Are you are getting all the discounts you are eligible for? You may be able to get a discount if you:

• Have a good credit score
• Own a home that has increased in value
• Buy all your policies (home, car, life) through the same broker
• Raise your deductible (if you have significant savings to cover the difference)
• Have a clean record
• Take a defensive driving course
• Bring quotes from other insurers to the table
• Have decreased annual mileage
• Reduce coverage on older cars (compare its worth with your comprehensive payment)
• Prove your child gets good grades
• Are a senior citizen
• Pay in full

Stay tuned for a blog post about the next step in budgeting.