What You Must Know About Finance

Create and Maintain a​ Budget
The first step to​ avoiding the troubles of​ financial debt is​ to​ create and maintain a​ budget .​
It’s not as​ intimidating as​ it​ sounds, don’t worry.
First off, create a​ list of​ all your monthly income and also a​ list of​ your monthly expenses .​
When determining income, list all sources including alimony, child support, side jobs, etc .​
In calculating expenses, be sure to​ include housing, food, transportation, utilities, entertainment, etc .​
To gain an​ accurate reflection of​ actual expenses, sit down each night and write down expenses, just make sure to​ save receipts .​
Determine if​ your income covers all of​ your expenses .​
If the answer is​ no, then some expenses need to​ be reduced .​

Adjust expenses .​
If it​ is​ a​ small discrepancy, it​ may mean reducing some minor expenses like entertainment or​ cell phone plan .​
If the deficit is​ larger, you may need to​ downsize your vehicle or​ living arrangements .​
If your income covers all of​ your expenses, you still may want to​ trim some of​ the excess fat off your spending habits .​
This can free up extra money for things such as​ vacations or​ college funds for your children .​

Additionally, consider if​ you need to​ add new categories .​
Some areas that are often overlooked are debt reduction, emergency savings funds, and retirement savings .​
An emergency fund ensures there is​ an​ adequate amount available to​ cover unforeseen events (car emergency, etc), should it​ arise .​
This will eliminate the need for using credit which can quickly damage your budget .​

There are several advantages to​ sticking to​ your budget .​
Firstly, most people have set financial goals that they would like to​ reach in​ the future .​
Sometimes it​ may be a​ trip, a​ brand new car, or​ a​ college education .​
a​ budget can help people save money to​ make these goals a​ reality .​
Additionally, many people are crushed under heavy consumer debt .​
Without a​ disciplined pattern of​ spending, it​ is​ virtually impossible to​ make much headway in​ reducing debt .​
a​ personal budget will provide the necessary framework to​ begin eliminating these inflated account balances .​

If executed properly, a​ budget will allow a​ person to​ simultaneously meet their expenses, place money into savings, and pay back outstanding debts .​
Therefore, it​ is​ anyone’s best interest to​ create and implement a​ budget .​

Cut Back on Spending
At first it​ may seem difficult to​ limit spending and stick to​ a​ budget, however there are a​ few practical changes that you can make everyday that will cut your spending more than you expect .​

Firstly, alter credit car behavior .​
Start to​ pay cash whenever possible .​
This will help you avoid making a​ purchase unless you actually have the money available .​
If you decide to​ make a​ credit card purchase, be prepared to​ pay the balance off monthly .​
This will save a​ lot of​ money through avoiding interest charges .​
If you already have a​ credit card balance, then transfer to​ a​ card with a​ low interest rate .​
Also, find a​ card that does not charge an​ annual fee .​

Another tip is​ to​ pack your lunch everyday .​
All of​ those lunch hours spent at​ restaurants will add up .​
Bringing your own lunch can save you several dollars every day, which will add up over time .​

Use your cell phone during off peak hours .​
Some people will spend a​ couple hundred dollars a​ month on phone charges .​
Avoid this by making most calls during off peak times .​
Check with your service and plan to​ find out when you have cheaper or​ unlimited calls .​

Stop throwing away the Sunday newspaper before skimming through the advertisements .​
Clip some of​ those coupons and check out the sales .​
This may seem tedious, but the savings are often worth it .​
Many stores will double or​ triple the amount of​ the coupon .​
This technique can save you up to​ 20 or​ 30 dollars each time you head to​ the food store .​

Additionally, refinance .​
Mortgage rates have been extremely low over the past year .​
This has been a​ great opportunity to​ reduce the monthly house payment significantly .​
If you are planning to​ have your house paid off prior to​ retirement, then you may want to​ factor this in​ before refinancing .​

Finally, bundle your insurance .​
Many insurance companies will offer their customers lower rates if​ they purchase multiple policies .​
For instance, some people use the same agent for multiple cars, and others combine their cars and house .​
Always keep in​ mind that a​ dollar here and there really begins to​ add up .​
Avoid the temptation of​ thinking that changing your spending habits wouldn’t save that much money .​

Start Saving!
So you are loaded down with bills to​ pay each month and are wondering how you can begin a​ savings account for emergencies and other high-expense endeavors .​
In other words, where can you find that extra cash to​ put away for later?
Firstly, when configuring your budge, plan for your savings first .​
You will grow richer each month if​ you begin to​ pay yourself first .​
Before paying any bills, decide on a​ set amount that you will pay yourself first—maybe five or​ ten percent—or whatever you decide—of your paycheck .​
Then, deposit the amount into a​ savings account before paying any bills .​

When you do this at​ the beginning of​ the month, your entire paycheck will not suddenly slip through your fingers .​
If you wait until the end of​ the month, there may be nothing left to​ save .​
Paying yourself first will give you a​ systematic way to​ make your money grow .​
Regardless of​ your profession or​ your income, this system will work if​ you stick to​ it .​

Another technique you may try for saving money is​ to​ empty your extra change into a​ coffee can or​ a​ jar each day .​
At the end of​ the month, roll the coins and put them into your savings account .​
You may be able to​ save 30 or​ 40 dollars each month just with your spare change .​

Remember that good money management is​ more than just a​ mathematical formula .​
It’s too closely tied with the ups and downs of​ living to​ be just that .​
Your money management plan is​ always subject to​ change if​ your life situation changes .​
The object of​ a​ good budget is​ to​ make your money go the farthest in​ helping you reach your goals, it​ is​ not there to​ force to​ you to​ abide by rules .​

Don’t get discouraged if​ the budget plan doesn’t work perfectly right away .​
It may involve some revising and editing until it​ fits your needs .​
Then, make sure to​ review it​ often, and be sure it​ is​ making the best use of​ every penny! Because we know how helpful those spare pennies can be!
Avoid Spending Pitfalls!
With all the advantages that are evident from personal budgeting, it​ is​ no wonder that more and more people are relying on them to​ reduce debts and increase their savings .​
However, all ‘budgeters’ need to​ be careful to​ avoid some common pitfalls that appear often .​

Credit cards may seem like small pieces of​ plastic, however they can cause a​ great deal of​ trouble for the owners .​
It is​ common for people to​ make unwise purchases, which they would have avoided otherwise, because they had the credit card in​ their wallet .​
The best solution for many people is​ simply to​ get rid of​ credit cards and begin paying only by cash, check, or​ debit cards .​
You may want to​ keep one card handy for emergencies, but it​ is​ probably best to​ keep it​ out of​ reach, and far away from your wallet.
Another problem with budgeting is​ impatience .​
There are financial goals set, but people do not have the patience to​ complete a​ savings program .​
For instance, an​ individual begins setting aside money for a​ new car; however, after a​ few months they discover the car of​ their dreams .​
Rather than waiting, they make the purchase .​
This could pose some serious financial strains .​
Discipline is​ a​ must to​ prevent impatience from breaking your budget .​

Once a​ person makes a​ budget, they often fail to​ adjust it​ when necessary .​
a​ budget is​ created using a​ set of​ expenses and income figures that are liable to​ change .​
As these figures do change, it​ is​ important that the budget changes to​ reflect the adjustments .​
There could be some major deficits if​ this is​ not done appropriately and promptly.
Of course nobody forgets about Christmas or​ Hanukkah, however many people do not consider budgeting for holidays when creating a​ budget .​
Therefore, adequate funds have not been set aside for presents, food, parties, etc .​
These items should be factored in​ and saved for throughout the year.
Finally, many people factor in​ transportation and accommodations for vacations in​ their budget, however they underestimate money needed for food, entertainment, and spending money .​
Keep in​ mind that all the resorts and tourists areas are double or​ triple what you would normally pay .​

With a​ little planning, you’ll be on your way to​ saving more money than you ever thought possible!

Easy Money-Saving Changes
One of​ the most obvious and easy ways to​ save some extra cash is​ to​ change some of​ the way you use products and items in​ your everyday life .​
The key is​ to​ make minor changes .​

For instance, always buy the cheapest hand soap you can find .​
The quality doesn’t necessarily go up with the price and you can use it​ in​ place of​ ‘bath soap.’
Always use the whole product .​
Turn bottles upside down and drain to​ get the last bit from them .​
Tear open sugar and flour sacks to​ get everything; squeeze or​ cut open tubes to​ use it​ all before running out to​ buy more .​
You’ll be surprised at​ how much there really is​ left!
Also, never use more than you need .​
Just because it​ says on the box that you need a​ full cup, doesn’t mean that you really do it​ need it .​
Half a​ measure of​ laundry detergent and a​ half teaspoon of​ dish soap are examples of​ what are usually enough, rather than what the manufacturer says .​

To save some cash, you can use some of​ the things in​ your house in​ some unique ways .​
Instead of​ spending lots of​ money on the fancy floor cleaners, try using ammonia .​
It does a​ great job, and you can use plain water in​ between times .​
If your furniture needs some polishing, mix equal parts of​ white vinegar and vegetable oil and rub on the furniture .​
Buff with a​ cloth until it​ shines .​

For a​ freezer bag, use empty chip bags and close with masking taps .​
Also try a​ bowl with a​ lid, such as​ a​ margarine tub .​

If your skin is​ feeling a​ little dry, there are several substitutes for expensive lotion .​
Petroleum jelly rubbed into your hands at​ night after a​ warm water soak, mayonnaise (rinse w/ cold water after), or​ any other oil based food .​
Just be sure to​ put it​ on immediately after your hands have been in​ water .​
To save some money on laundry, dissolve a​ bar of​ handsoap in​ water to​ replace laundry detergent .​
Add three gallons of​ hot water, mix thoroughly and add a​ cup of​ washing soda .​

Sure, these are small changes, but added up, they can put some extra change into your pocket throughout the year!

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