Do you cringe every time you check your bank account? Are you already worried about holiday shopping and wondering how your budget is going to handle it? If managing your family’s finances is a challenge for you, you’re not alone. Many people struggle with keeping the budget in check and living within their means, especially in this difficult economy. Thankfully, there are some things you can do to improve your finances. These tips will help you get a better grasp on balancing income, bills and savings so you feel confident about money.
Track Expenses
Many people don’t know where to start with making and keeping a budget because they don’t have a good understanding of where their money goes. One of the first steps to making a solid financial plan is seeing how you’re currently handling your spending so you’ll know what needs to change. Try setting a goal of writing down every expenditure at the end of the day or the week. Don’t forget to include bills that are automatically paid and credit card interest. Then look at the month overall and see how your spending compares to your income.
Prioritize
Once you know where your money is going every month, you can determine if your spending habits need to change. Most people do decide they need some sort of change in the how they spend money, so the next step is to prioritize what things are important enough to keep. For example, if you purchase lunch every day, is it worth the financial savings to bring lunch from home? Can you limit yourself to one fancy coffee a week instead of every morning? Maybe those things are important to your lifestyle, but you’re willing to drop your cable subscription.
When you sit down and prioritize your spending, you can decide which habits you need to break. Maybe you stop weekly manicures and instead put that money into a savings account. Or you try meal planning and cut down your restaurant and takeout expenses. The key is to find what will work for your personally so you can stick to your new goal.
Reduce Monthly Bills
You may think it’s only nonessential spending that you need to change, but you may be able to save significantly on your essential bills as well. You might be a good candidate for refinancing your mortgage to cut your monthly payments. You could also save a significant amount by switching to a new insurance provider. Contacting a refinancing specialist or looking into auto insurance in Oakland can show you whether or not you can lower these monthly expenses. Utilities are another area of potential savings. Just switching to CFL light bulbs can drastically lower your energy bills.
Final Thoughts
If you’re afraid to pay your bills every month or feel like you’re always worried about your finances, it’s time to be proactive and change things. Tracking your expenses let you know exactly where all your money is going every month so you can figure out where you need to cut back and which expenditures are really important to you. You can also research ways to lower your monthly bills by finding a new insurance provider or improving the energy-efficiency of your home. Being in control of your expenses is the first step toward financial freedom.
My husband and I have no debt. We paid off our house in 5 years. We pay credit cards off monthly. I do like the suggestion about trying to save money by switching insurance. I've heard that you can save a lot that way. Thanks for the reminder. kristiedonelson(at)gmail(dot)com Thank you.
That's amazing!! Congrats.