Create a Budget and Have More Fun
7 Money Saving Tips that Reduce Stress and Make Life Better
Creating a budget (and sticking to it) is actually a very healthy exercise – for your financial future, yourself, and your family. It’s undeniable that lowering or even eliminating your debt will reduce the amount of stress that you feel. The less stress you feel, the happier and healthier you’ll be, and the more you’ll be able to be fully present for the ones you love. One of the best ways to lower your debt is to create a budget and to follow it. Here are 7 easy ways to create a budget that you can live with, and that will make you feel better.
1. Don’t use credit cards. This is an easy one. We all know how damaging credit card interest rates can be to our financial future. Make a habit to only use your credit card in emergency situations. By choosing to live on only what you have in your bank account, you do two things. First, it will make you more mindful of what you spend your money on. Second, it will lower the cost of those things you buy, by eliminating the interest that becomes part of your purchase. Instead of taking out that plastic, try writing a check for what you buy. You can even save money by getting personalized value checks.
2. Plan for an emergency in your budget. Not many of us ever prepare for the unexpected, but it happens to us anyway. By having a little extra, or even a separate emergency fund, you can avoid having to pay for that emergency with a credit card. Also, be realistic about what constitutes an emergency. If there’s a sale on something that you’ve been wanting, ask whether that money is in your regular budget. If it’s not, that doesn’t make it an emergency situation.
3. Consider a low-interest credit card. In some cases, it may make sense to get a low-interest credit card and consolidate your other cards onto it. That will mean that more of your payment goes toward paying down your debt, and less toward making the banks richer. Be careful about doing this, however; many cards still charge a transfer fee to do this consolidation. Get out the calculator and see if it makes financial sense to consolidate.
4. Budget an amount to pay down your debt. As you find ways to save money, take the amount saved and put it directly toward paying down your debt. In doing this, you are actually paying yourself, since every interest dollar you avoid saves you more of your own hard-earned cash.
5. Stay out of debt. As part of your new commitment to budgeting and saving, make a pact with yourself to stay out of debt for good. As good as it feels to buy something you may really want at the time, it is actually a trap. The immediate gratification from buying those cute shoes will come back to bite you when you get your credit card bill. So just because you’re doing better and budgeting wisely, avoid rewarding yourself with frivolous purchases and starting the pattern all over again.
6. Work toward an expense fund. Once you’ve made the progress needed to pay down your debt, continue saving money to put into an expense fund. It’s always a good idea to have money set aside to cover expenses in case of an emergency or the unexpected loss of work or clients. Try to set aside enough to cover your daily expenses for at least 4 to 6 months in case the worst happens.
7. Make a list. One of the best ways to avoid making unnecessary purchases is to always make a list when you shop. Only buy what’s on the list and stick to it. Make lists for all of your expenses, and try writing down how much each item on your list cost to buy. If you do this and keep the lists, over time you will be able to track just how much you spend, where the money goes, and how you can save even more.
AUTHOR BIO: Kim Moore is a work-at-home mom from San Diego, CA. She used to hate budgeting, but she learned to love her savings account instead. She likes to buy checks online to save on bank fees, cook meals at home, and take the kids to the park.
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