It Is Important To Know Where Your Money Goes

Category: Finance, Financial Planning.

Living within your means is a liberating way to live your life.

Living within your means gives you the freedom to save money for special things rather than always scrimping to pay your bills. It means no debt is one of the most common causes of relationship stress. Unfortunately, many people don t live within their means. This happens for many reasons. They live above it, way above it. Maybe they just don t track their expenses, and purchases are made without thinking. Maybe shopping is a misguided form of therapy.

Maybe they re trying to keep up with their friends and family. Whatever the reason, the end result isn t a happy one. It is important to know where your money goes. If you feel that you could do more to live within your means, here are a few tips to help keep your life on track and your financial status right where it belongs: Tip# 1: Keep track of your spending. Once you have an idea of what you re spending your money on, you can begin to control it. A new car depreciates the moment you drive it off the lot.

Tip# 2: Buy a used car or at least keep your new car for more than a couple years. Sometimes it depreciates as much as 50% . Tip# 3: Don t be afraid to grocery shop with coupons or stock up on items for sale. A used car already has that depreciation figured into the cost. Personally I love it when the grocery offers" buy one get one free items" , particularly when the items are large ticket items like meats. Tip# 4: Do buy quality clothing items, not quantity.

Not only do I save tons of money but when I can t figure out what to make for dinner, I can just open my freezer and I have options. When you re shopping for yourself, don t make whimsical clothing purchases or follow the latest trend. Spending$ 100 on a pair of jeans that will be out of style next season, or spending$ 150 on a pair of jeans you can wear for five years? What s better? Tip# 5: If you have a credit card debt, develop a plan to get out of it. A phone call to your creditor can usually start the process.

A debt elimination plan begins with reducing your interest rate. Next, stop the charging on those credit cards and get busy paying them down. A great way to manage the process is to develop a monthly budget. Pay more than the minimum balance or you ll never get it done. Your budget will contain your income, expenses including debt and your savings. It is empowering to have complete control over your money and your finances, certainly less stressful than letting your money control you! Living within your means is possible!

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