1. Write It Down
Choose a method to keep track of expenditures. Consider getting a financial management software program or using your bank's online banking resource to see easily where your money is going. Itemize each category by food, entertainment, household expenses like utilities, carpet cleaning and home owner's association dues and interest monies like personal loans and credit card debt. Review your budget by subtracting what you earn by what you are paying out. If you come up with a negative figure, you have some work to do.
2. Cut It Down
Whether you are well within your household financial management budget or running in the red each month, look for places to cut down or rearrange spending. Shop vendors for plans on phones, cable or Internet service. Consider purchasing food and toiletries in bulk at a warehouse supermarket. Clip coupons and purchase your produce and meat seasonally when they are on sale. Look for people to car pool with to work or school. Set aside a certain amount of money to spend on entertainment a month and stick with it. Taking the kids to the playground or a free concert in the park is a better alternative than going to a pricey amusement park.
3. Save First
If you do not have a savings plan in your family financial budget, your priority should be to create an emergency savings fund. Build up until you get to two or three months worth of income. Ideally, you should have 6 months worth of money available for emergencies. If you run into a problem you will not have to use your credit cards or borrow from friends or family.
4. Smart Retirement Savings
Utilize all the resources available to you at work for 401 K or other retirement plans. Make smart decisions. For example, if your employer matches, try to contribute as much as possible up to the maximum for matching funds. If you have credit card debt, and your employer does not match, hold off donating a part of your pay check until you pay off your debt. If your employer doesn't offer anything, consider a Roth IRA, which is a great tax saving tool.
5. Protect Yourself
Part of good household financial management is investigating your credit report for errors. Check your credit report free once a month at websites such as annualcreditreport.com (http://www.annualcreditreport.com). Dispute any unrecognizable line items to maintain your credit worthiness. Read all credit card, personal, car and home loan documents carefully for fees and try to negotiate in each instance. Check your bank's checking and savings plans against competitors to ensure you're getting the best deal.
Member Comments