Some simple money management tips can really save you when your finances take a downturn. There is no need to panic over lost income. There is usually something that you can do to reduce your expenses while you search for a way to get your income back up to normal. It is smart to take a personal inventory of what you have coming in and going out. After doing your research, the following ideas may be helpful to you. You may be able to think of some more. These should get you started. Taking action on what you can do will actually help you to feel better about your situation.
What Do You Have Coming In?
The first thing you need to do is to determine just where you stand financially. Do you have any savings to rely upon? Do you have any money coming in on a regular basis? Do you have money that comes in at all? Are there some things you can do to increase your income? If it is at all possible do not spend savings. That is your emergency money. The key word there is emergency.
Where Is Your Money Going?
Next you need to determine what is going out each month. Write it down. Don’t just assume that you know without having everything written down. Sometimes you have to simply write down everything you spend for a whole month to get a real idea of where your money goes. Keep receipts for everything. Use your checkbook register or if you pay for everything with your debit card then look at your bank statement. If you use Quicken or other computer programs, then you may already have most of the information you need.
I know you hate the word budget, but unless you have some kind of plan to limit overspending and make room for the necessary things you will regret it. A budget is nothing more or less than a simple plan to help you manage your finances. It can actually help you figure out how to afford the things you really want. If you are spending your money on things that are not important to you then you will not have enough for the things that are.
From the information you have gathered you should now know how much is coming in and how much is going out (on average) each month. Now you can form a simple plan to reduce costs on some things to make room for those more important to you.
If you have recently lost your job, retired, or had to accept a job that pays less than your former wage you may have to make some lifestyle changes. The first big cut can be in entertainment. Going out to eat, going to movies, sports games, and expensive hobbies may have to be put on hold.
Determine what you can afford to do and try to make use of alternative choices. Obviously, movie night in is less expensive than movie night out. You get the picture. Don’t take away everything that you enjoy but find ways to make it affordable.
Do you pay for cable or satellite television? Check to see if you can pick up local stations with just an antenna. Some people think that free TV no longer exists but it does. Depending on what you are currently paying that could be a big saving each month. Another alternative is to simply drop down to basic services until you get your finances in a better condition.
If you have high-speed internet, you can get many TV programs online. Using a cable that you get from your local Radio Shack you can hook your laptop up to your big screen TV. There are also streaming media players like Roku which have literally 1000’s of stations. Some are free, but others require a monthly fee. Netflix, RedBox, and HuluPlus are just a few of the premium (Paid) channels. Those fees may be a lot less than you are paying now.
Grocery Store Costs
Many people say that they would be fine if they just didn’t have to buy groceries each week. When things are going good, you tend to buy things you don’t really need. You also buy a lot of quick foods that cost more than cooking from scratch. There are a lot of sites online that explain how to do couponing but that never worked for me. If you shop the perimeter of the stores then you usually will eat healthier and spend less too. The middle aisles are full of mixes, chips, other snacks, cookies and other things that are not good for you.
You know your family. Plan ahead, make a list and stick to it. Get what you need for at least a week at a time and don’t go back. Each trip to the store costs you more money. You will always see something else you want.
Home Telephone Service
The traditional home phone service can eat up a lot of your dollars. Local service, long distance service, things like caller ID, call forwarding, voice mail, etc. all add up. There are ways to reduce that cost and still have all those services.
Your home telephone service may also be where you get your internet service. Check to see if you can get internet separately. If you have a good wireless service or alternative to land line, you may be able to get rid of that expense. Most cable internet services offer voip telephone service much cheaper than the traditional land line. There are also independent voip services available as well.
Another alternative is a home phone system that uses cell phone towers instead of a land line. That type of service only cost between 15 to 20 dollars a month. It just depends on the company you choose. With that you get local and long distance, caller ID, call waiting, voice mail and more. The only con is if your cell reception is not good in your area.
Before you get rid of the land line make sure that you do not have life alert services or security services that require a land line to work properly. You have to determine what your individual needs are.
Mobile phones have become somewhat necessary in today’s world. However, there may be services that you are paying for that are not used enough to justify the high cost. Evaluate what you are using and what you really need. Everyone’s situation is a bit different. Some use their cell service only for emergency backup while on the road. Others use it for their main way of communication. Some people have completely dropped their landlines and only use their mobile phones.
There is a huge difference in price in wireless services. Absolutely everything with one carrier may be a lot better quality but also a steeper price than with a competing carrier. Before you change carriers call them to see if they can help you get a better price on the services you use. They may help you just to keep you. If they don’t there are alternatives out there. Competition is helping to bring the cost down for everyone.
One very important rule that many people ignore is using your credit card unless you know for sure that you can make more than the minimum payments and make them on time. It is best not to use it at all. Otherwise, you will find yourself in deeper than you are now.
If your payments are posted after the due date you will find that the interest charged on your accounts has been raised sky high. You are not likely to get them reduced either.
There are many ways to manage your money better whether you are needing to cut costs because of a financial downturn or whether you are trying to raise funds for college education or an online education. It will take some thought and some planning. You will have to determine what is most important to you and your family.
The last thing you want to do is decide to do away with everything possible and alienate your family. Some of these may work for you. Some may not. You know your situation and what your priorities are.
We would love to hear some more ideas. Perhaps we can all help each other to have a more fruitful and productive life.
Your friends who dare to care,
Jay and Glenda