Get started
As with any lifestyle change, taking the first steps is the most important thing.
*Set goals – Decide what is most important based on the values of the family, whether it is paying for college, getting out of debt or paying for a family vacation. Invite discussion among other members of the family. Goals could be short-term or long-term. Setting a goal gives the family something to work toward rather than just viewing the situation day-to-day. They should be specific, measurable, attainable, realistic and based on a timetable.
*Keep a log – Create a spending log that tracks every dollar that comes into the family and that goes out as an expense. This will help identify where the money is being spent. Determine which expenses are fixed and which are flexible or occasional.
*Save – Set aside a certain amount of money each month or from every paycheck that gets deposited into a savings account. The best way to do this is to take advantage of automatic deposit, so the temptation to spend the money isn’t there. Watch spending There are certain fixed expenses that need to be paid each month, such as the mortgage, car payment and utility bills. Others are optional and can be controlled.
*Focus – Some people don’t realize how much money they spend on items that are unnecessary when funds are tight. Be patient and learn to say no to wants and concentrate on needs.
*Limit credit spending – It may seem like a good idea to take out the credit card to purchase items with the plan to pay it off later. If the entire balance is not paid off on the next bill, interest charges essentially increase the price that was paid for the item. Develop a budget It’s not necessary to increase income to reach the goals set for the family. If done right, a budget provides a plan for reaching the goals that were set forth earlier without requiring additional money.
*Write it down – Use the spending log and goals and write them down rather than try to memorize them.
*Seek opportunities – Try to renegotiate debt payments, especially on credit cards. See if the company will lower the interest rate. If there is an unnecessary expense that recurs, try to eliminate it or find a cheaper alternative.
Becoming a better money manager doesn’t mean going to school to become an expert. By setting goals, getting rid of unnecessary expenses and sticking to a budget anyone can get a better handle on their own financial situation.
Katherine Watkins writes for a home equity loan site that provides a free equity loans calculator to help people find out how much they can afford to borrow. She believes in the saying “every little helps” and uses the tips outlined here to stay in control of her finances.
