Have you ever noticed how the world seems to be divided into two kinds of people? There are those who manage their money wisely and always seem to be able to cover their bills. Then there are those who are living from paycheck to paycheck. You may make the same salary as your best friend, but how is it that they always seem to have a bit of cash set aside for going on great vacations or investing in that hot stock option?
Well, there are some ways that you too can join the money crowd, but first you have to take steps to manage the money you have now a bit more wisely. Here are a few tips to help you get started on that road to smart money management and financial stability.
Buy What You Need, Not What You Want
One of the realities of today’s financial world is that it is all too easy to buy everything in sight. We reach for the credit card and make that instant payment, even if we are on the web. In fact, with the technology available now for instant point of sale online purchasing, you can soon find yourself accepting delivery of expensive new toys you forgot you ordered late one night after a night of drinking with friends. It takes real willpower today to only buy what you need, but the truth is you can get there.
It starts by recognizing that you have a shopping problem and making the vow to stop right now. Put that credit card away and keep yourself on a cash only diet for the next few months. I have even put clients on a strict budget that allows them to only take out a certain amount of cash each week to get them through the week.
Put your bills on autopayment, allocate your money for having fun to a cash only system. This ensures that it stays within budget by limiting how much cash you can take out of your account each week. This will get you into the habit of thinking before you buy. You will soon find that you are only buying what you need, because that is all you can afford.
Pay as You Go
Another important tool is to pay as you go when you are travelling. Instead of splurging on that big expensive item when you are on vacation, keep the cash expenditures to within what you are allowed to spend this week.
You can budget for big ticket items when you are on holiday by planning for them ahead of time. This way the cost is absorbed before you even have time to see interest charges on your credit card. Pay as you go and you will never get behind in your credit card payments again.
Make A Budget
Most of all, learn to stick to that budget. If you have to, you can actually take out envelopes and write down your budget amounts on each, filling them at each pay period and then using them as the week or month goes by.
Budgets are more important than ever in this age of credit card debt and foreclosures on homes. We all tend to live beyond our means, but you can limit your expenses by avoiding paying with credit and only buying what you can afford. It might mean putting off getting that new car or bigger screen but in the end, it will be worth it.