Guides To Managing Your Money
Most average income families walk a fine tightrope when it comes to managing the household budget. Worldwide statistics show that only 3 in 10 people live within their income which is frightening. Many people rely on revolving credit in their credit cards, or on loans to supplement their incomes. Some people take loans upon loans which eventually lead to disaster. Banks and financial institutions own most people and throughout their lives the majority of people are never really financially free. To make it worse, many people do not want to face the reality of their financial situations they find themselves in.
The average American family’s spending profile is deteriorating rapidly but this is also true in many countries of the world. The reason for this is the increase in prices of food, fuel, education and debt repayments. The average income family will spend between 55–75 percent of their income on these 4 items and many dip into credit cards to manage it. When ever there is an increase in costs for any of these 4 items, it impacts directly on any household budget and the shortfall is normally funded with additional credit card debt, and loans which in turn leads to more financial stress.
How can you manage your finances?
The best way and the first step, is to know where you stand financially. You need to work out how much your current lifestyle is costing you and this is used as a base to identify how and where you can improve. You need spend time with your family and sit together to discuss where you stand financially and see where changes can be made to start alleviating your financial pressures.
Find out where you can curb your spending.
Curbing your spending normally requires a change in lifestyle. This may mean you and your family will have to sacrifice in certain areas and the best way is that you mutually agree on the steps you are going to take.
The following tips are some of the less painful ways to reduce spending:
Start by analyzing your existing budget
A perfect budget is difficult to find because invariably extra costs can pop up that you have not considered at any time. There are some static payments that you make each month that are set amounts and others like utilities that may only fluctuate a little. Your mortgage and car payments will remain the same as well as loan repayments and education fees.
Once you have analyzed your general spending habits you can develop a plan to manage and control your spending. In fact the entire family should have a personal plan because everyone is affected by your financial situation.
The solution often lies in cutting back on small things.
Always shop with a list when you go to the store and do not deviate on what you have to buy.
Keep a list on your fridge and write down when you need something that is finished. Never go shopping if you do not need something and when you go shopping take your list with you and only buy what is on your list. Ignore the special offers that are not on your list because this will lead to impulse buying. Where possible try and ignore brand names and choose in store brands which will be lower in price because they are not packaged in fancy wrappings.
Name brand products in any grocery store are normally more expensive than common store name brands. The quality of store brands is often just as good (if not identical). If you buy the store name brands you could easily save 15 - 25 percent of your grocery bill. On clothing the potential saving is much higher and the quality just as good.
Leave your credit cards at home when you go shopping
If you mainly use credit cards to pay for your shopping it is a good idea to get into a habit of leaving your credit cards at home and pay cash. It might be hard to begin with but you will soon see that it will start working out for you. Alternatively only use your credit card if the money is available in your account. You can also consider decreasing your credit limit on your card to fit your monthly budget in small bites.
If you really have to have something be patient and wait for the sale
Patience could save a lot. All the retailer stores have regular sales. If you wait for the item on the sale you can easily save 50 percent or more. Almost everything you want will come on sale and it is just a matter of saving your money and waiting till it does.
Use products completely before discarding them
A lot of money is wasted because we do not finish products. This is particularly relevant when there are children in the house. Whether it is food, toothpaste, make-up or other beauty care products or items used for a hobby, you probably have lots of unused or partly used items in and around your house. An easy way to save spending is to make sure everything us used up before the new item is purchased or opened. This simple method will not only help you to spend less, but also to clear out some of the clutter in your home.
Save money to Shop
It is good practice to save for items to be purchased. You will save money when you buy cash (preferably on the sale) and you will feel good about it. In addition it is good fun to be on the look out for bargains especially if the money is in your account.
Remember you are responsible for your own financial freedom.
Some sacrifices you make might be unpleasant but knowing up front how you plan your money normally brings with it financial freedom. Getting your budget back on track is like losing weight. It takes time and there is no quick fix. However your patience WILL be rewarded!
Guides To Managing Your Money
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