Whatever your financial situation, it is important to save money and be vigilant on what you are spending. You may be well off now, but there is no guarantee that your finances will be stable in the future, with unexpected events in life such as job loss, or damage to your house causing you financial difficulties. Alternatively, you may be struggling with money now, and every day you are dreading the next bill arriving in your mailbox.
We all need to be money wise – being careful with the money we do have in our pockets. Here is some advice to help you manage your money better, and save any extra cash for possible difficult times ahead.
Make a budget plan
We do not all have the luxury of being able to spend money without worry. The rich and the privileged might be able to buy a yacht in the South of France and still have enough money to build their own fleet of yachts if they wanted to. Unfortunately, the rest of us do not have the option to spend thousands as if it were pocket money. We need to take care of the money we have and not squander it.
There will be ways you can cut down on unnecessary costs, so manage the money you have each month by making a budget plan. Sit down using your bank statements and receipts and work out exactly where your money is disappearing to each day. You may often wonder why you have less than you think you do, so this is the perfect opportunity to track your spending.
Consider every expense, from food shopping to paying your bills. Do not neglect small purchases, as the amount can add up. A bar of chocolate every day may seem like a small investment, but as we all know, the price of chocolate keeps going up, so even one a day is going to dent your wallet.
Some areas in your budget are essential. You need to pay your bills, and you also need to eat. However, if you are struggling, ask yourself if you really need that Netflix subscription this month, or any similar ‘luxury’ expenses. If you cannot afford the necessary things in life, you need to make changes elsewhere when possible.
Many of us struggle with money because we spend too much on things we want, rather than need. Online shopping is easy, and we can now purchase many items with only one click. When the words ‘Buy Now’ flash on your computer screens, the temptation can be strong. There is no easy way to say this, but resist, especially if you know you cannot afford it. Even if you do have the money, you do not have to buy everything that attracts you online or in the store.
We all deserve to treat ourselves, so the occasional expensive purchase is fine if you have the means to pay for it. However, companies know how to sucker consumers in with fancy advertising and ‘bargain’ prices. The truth is they often take us for the money-wasting fools we can be. Every year Apple brings out their latest smartphones and tablets, and fans of the brand queue up for hours to buy them. Why? Often, the difference between this year’s model and last year’s is slight, but Apple still convinces us we ‘need’ them in our lives. Is a smaller screen or a lighter weight really the incentive you need to spend a lot of money on the latest model? Probably not, but many people get into the mindset that they do thanks to attractive marketing and clever sales pitches.
Bottom line: avoid the temptation to buy anything on a whim. Think before you click your computer button and ask yourself why you want to buy it. Do not be a follower of fashion, be it clothing or the latest in technology. You do not need to buy something because everybody else has one. They may have been suckered in by hype, but you do not have to be.
Find better deals
While many companies help us waste money, a lot of others are vying for our business in a competitive marketplace. For example, the price of energy may be going up, but some companies are cheaper than others to undercut their rivals are. By shopping around, you will be able to save money on your energy bills, so use comparison sites, and find a deal that is right for your home. Lumo offers cheap electricity, so look at their website and compare their prices with your current provider. You do not need to stay faithful to the company you have been with for years, so be wise and switch when it benefits you.
There are many other ways to save money by switching providers. For example, think about your car and home insurance. When it comes time to renew, take the time to see what other deals are available. You do not need to stick to your smartphone provider, and you can swap around your cable TV packages if you do not watch a particular channel anymore.
Debt is a trap we can all fall into, especially when it comes to making expensive purchases that we cannot afford on our monthly salary. Whenever possible, we should avoid taking out a bank loan or a credit card unless we know we can afford the monthly payments. Sometimes we need to consider the option of taking out credit, so shop around and find a low or zero interest option so you are not paying back more than you should.
Another good idea is to manage multiple debts by amalgamating them into one monthly payment. Tie this in with a low-interest option and all your debts will be paid off sooner, without the stress of several loan companies pestering you each month for your hard-earned cash.
Should you find yourself struggling with debt, always seek professional advice rather than ignoring the issue. You do not have to let debt overwhelm you, especially when you cannot afford to eat or care for your family. There are professional organizations set up to help people in difficult situations, so do not be ashamed to admit the problem.
Spend more to save more
A strange concept, but sometimes you need to spend more money to save it in the end. For example, making your house energy efficient is going to damage your bank balance in the short-term, but you will save on costs down the line. Changing your light bulbs is a good place to start, using halogen instead of the traditional incandescent light bulbs. They last a lot longer, so not only do they use less electricity, but also you will not have to replace them on a regular basis.
Those of you with old appliances in your home, such as the dishwasher or refrigerator, will also be using more energy. Consider buying new items, as most are manufactured with the ‘Energy Star’ rating, a guarantee to you that they will use less electricity.
There are other ways to improve your home, such as insulating it to prevent any unwanted drafts from seeping in, and not allowing the warm air from your heating out. You could also consider solar panels, using the natural energy of the sun to generate your electricity.
Team up with your family
You may be keen on saving money, but if your family does not follow suit, you are going to be frustrated and out of pocket. Therefore, sit down with your family and cut costs together. Ask them how much money they spend each week (or how much you spend on them) and persuade them to find ways to cut back.
For example, instead of you driving your family everywhere, make it a goal to do more exercise together, and walk to work and school if the distance is short.
We all waste a lot of electricity in the home, so persuade your family to follow some simple money saving tips. For example, turning lights off in rooms they are leaving and unplugging devices when they are not being used. You need to lead by example, so do not be a hypocrite, and make an effort to be a nuisance to your family until they get in the habit of following some simple house rules.
Children do not understand the concept of money so find ways to teach them. For example, when giving them pocket money, encourage them to save each week rather than blow the money they have on something immediate. Make a colorful wall chart with a financial target, such as for the latest video game, and get your kids to add to a simple graph as they get nearer the goal. One day they will need to get a job, so encourage your children to earn money now, perhaps by doing chores around the house. Teaching them about saving up for what they want is a vital lesson and one we should all be mindful of learning.