What Does it Mean to Be Financially in the Red?

by Sam Ashe-Edmunds
Being in the red is manageable with the responsible use of credit.

Being in the red can make you blue. Based on how you record your personal finances or how a business keeps its books, being in the red means you have more bills and expenses than money to pay them. Depending on when and how you receive money, you may be in the red only temporarily.

It's Slang for Debt

The phrase "being in the red" originated with bookkeepers that -- before computers -- recorded income in black ink and expenses in red ink in their ledgers. Being in the red doesn’t mean you can't pay your bills, however. For example, if you have $500 in cash and have $750 worth of bills to pay, you are $250 in the red. If you have a credit card, you can pay some bills with the card, keeping some of your cash for an emergency. You are still in the red, though, because you owe the credit card company.

Keep From Seeing Red

If you have a part-time job and your boss pays you every other week or once a month, toward the end of your pay period, you might run out of money and have to use your credit card or borrow money from the folks. After you receive your paycheck , you are back "in the black," which indicates you have more cash than expenses.

About the Author

Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.

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