Household Finance

Have you ever wondered where all of your money goes by the end of the month?  You know you will never get rich off your pay check but why does your bank account always seem to hover near zero a week before your next paycheck is issued?  Is there something you can do about your spending and is there anyway you can make your current income stretch just a little bit further? 

Rest assured; there are ways.  Check out our useful tips for helping your family survive the money crunch of difficult economic times.

Keep Track Of Your Money

Household finance is the financial state of an individual or of a family and is made up of the money brought into a household (income) and the money taken out of a household (expenditure).  The best way to balance your household finance is to keep track of your expenses and understand where your money goes each month.  By seeing exactly where and how you spend your money, you will be able to devise a plan for how you can cut back on your expenditures.

Write down every penny you spend during a given month and keep a chart of where and on what you spent this money.  Then figure out how you can cut expenses.  For example, if you see that much of your salary is going towards grocery items, think of solutions for minimizing your food expenditures.  One way to do this is by studying the receipt from your grocery bill.  Circle the items that were most expensive and find a way to avoid purchasing those items on your next shopping trip.  You can cut costs by buying store brands or generic brands rather than name brands.  Take the time to cut coupons and watch for sales on items you frequently purchase.  Make the choice to eliminate prepared and processed foods and instead plan weekly menus that you will cook only using fresh ingredients.  You will not only save on your next grocery bill but also improve on your overall health as well.  Also, always bring a list to the store when shopping.  Stick to your list and eliminate any impulse shopping.  This little trick can often save families hundreds of dollars every month!

Beware Of Your Credit Card

Be sure to pay all of your household bills on time.  These include utility bills, and credit card bills.  You do not want to fall behind on these items.  You can not only jeopardize your credit rating but you can also fall into debt because of interest rates, debt that could take years to pay off.  This downfall is unfortunately very common with credit card use. 

One mistake many people make is thinking that their credit card is magic money.  You should never view your card this way.  Any money charged to your credit card needs to be, at some point, paid off.  The best way to handle using your credit card is by only charging what you can pay for when your bill arrives.  If you can't afford it, then you can't buy it.  You do not want the interest to accumulate on your bill.  Another great way to avoid finding yourself in credit card debt is to only pay for things in cash.  Save your credit card for a money emergency.

Prepare A Budget

Planning a monthly budget is another way to keep your household finance in check.  Figure out how much money you have to spend (your income), how much you need to spend to pay bills (rent, mortgage, utilities, car payments, etc…) and then figure out how much money is left over for other items (food, clothing, entertainment).  Try to put aside a small amount of your monthly income in a savings account or an emergency fund.  This will help you prepare for when those surprise expenses arise.  After all, you never know when your car might need a overhaul or the water heater will decide to call it quits.

Plan Ahead

Try to set long term goals for your finances.  Do you want to save for a house, a car or for an education fund?  It is never too early to begin planning and saving for retirement.  Find out more about pensions, 401Ks, and IRA plans and figure out which plan is right for your retirement future.  Also consider investing some of your savings in stocks, bonds, or mutual funds.  Investigate the different ways you can get the most return on your savings.

By properly keeping track of your household finances and by planning for your financial future, you can ensure secure and prosperous household finance.  Following the few suggestions given above can help give you better control over the amount of money you spend, avoid debt, and prepare you adequately for future financial emergencies and for your long-term financial plans.

Article written by Nicole Sivan