People are always talking about ways to make more money, which is, undoubtedly, a good idea. But sometimes, the reality is that we don’t really have to earn more, we just need to spend less. Too often we find ourselves slaving away from dawn to dusk to buy stuff we don’t really need. Spending less than you earn is the basis of healthy finances. Here are a few tips that will help mend your household budget.
Put everything on paper
The moment you realize things have got to change because you are constantly broke, is the perfect moment for a sobering reality check. A lot of people overspend consistently, even though they can barely make ends meet. That is why the first step is always to get a clear picture of your spending habits. Once you know where your money is going, it will be much easier to see where you can pinch a few pennies.
Come up with rules
The first rule should be to keep track of your finances constantly, after the initial analysis. A good way to do this is to charge everything to your credit card. If one of your objectives is to save up some cash for a rainy day, make sure you allocate a certain amount for your savings first, and only then allow yourself to spend the rest. Automate as much as you can the expenses that have to be paid. For instances, I have found a great way to pay my rent online. Not only does it save me time and stop me from accidentally spending my rent money, I also save extra cash because I get awarded credit card reward points and frequent flyer points every time.
Stores are always trying to trick us into buying more stuff than we really need. Never go shopping for food hungry, and whenever you set out to buy something, make a list of the exact products you need. Pay more attention to your needs and less to the marketing. Maybe you can get top of the line athletic shoes with soles optimized for running marathons, made of super-breathable high-tech materials that also grip uneven terrain and are worn by Olympic champions. In reality, you might just need a cheap pair of shoes to walk half a mile once every few months. Don’t fall for the hype, and don’t give into impulse buys that are out of your price range.
Expect the unexpected
A lot of people go wrong because they never count on unexpected expenses. The truth of the matter is – you don’t know when your car is going to break down, or when you might be invited to your best friend’s wedding. Always allocate a certain amount for unpredictable situations. If nothing unforeseen happens, you can keep that money for next month, or pop it into your savings account.
Don’t tempt yourself
If you need to curb your spending, be kind to yourself and avoid temptation. Don’t spend your time at malls or online casting longing glances at stuff you can’t afford. If your inbox is full of emails informing you of the best deals, new collections and special offers, maybe it’s time to unsubscribe from unwanted mailing lists.
Living within your means is an excellent lifestyle because it eliminates the stress that financial strain inevitably causes. A lot of the times, there is no need for excessive frugality, just a healthy awareness and organization of your budget. Tracking your finances might feel frustrating at first, but in time you will find the perfect balance between your income and your expenditures.