How To Live Within Your Means
July 8, 2008 – 7:55 amWelcome back!
Question: We’re a family of five—my husband and I plus our three children who are all in grade school. Every now and then we find it real difficult to maintain to our finances since prices of everything has gone up. We’ve tried saving money by carpooling and fewer visits to restaurants at night. How else can we cut down on our expenses? —Aileen D.
Answer: Our times are really tough these days. With the value of oil having surpassed the $100 per barrel, most goods increased in prices too.
Unfortunately, job compensation have not moved out up as fast, leaving many home makers scratching their heads, figuring out how else to make ends meet.
I want to congratulate you for finding ways to save on costs. Sharing a car to a destination and eating out less frequently will help free up more dollars in your budget.
Before we give you more tips on how to make your money last, there’s one valuable advice we’d like to share: Live within your means. That means living a lifestyle that can be supported with the purchasing power of your money right now. That money power may have been affected now by inflation.
Start by assessing how much money regularly comes in every month. Then document your expenses for a whole month to see where each bucks goes. Now comes the fun part: looking for ways to live within your means effectively without giving you to a life of deprivation. Here are some of them.
At home
1. Observe birthdays at home. Even if you’ll purchase food from outside, you will still save if you will do birthdays at home. Buy snacks at the supermarket, cook a buffet, and bake your own cake. What is important is spending birthdays with the people you love.
2. Test your existing utilities. Are you paying for cable and Internet plans that you barely use? If you only watch a few channels on cable every night, see if your cable company can give you a lower-priced plan. Also, if you don’t have a lot of prospect to use your Internet broadband subscription on a daily basis, consider switching to prepaid dial-up connection, which you only consume when needed.
3. Prepaid or postpaid cellphone service? If you’re on postpaid plan, review your past statements of account to see if you really need to be on a postpaid plan. If it is not maximized, you might be better off using prepaid service. It will even cost you less.
4. Review your insurance policy for health, auto, and home. You might be able to find lower-priced policies offered by other insurance companies. Just make sure they are established and reliable.
When shopping
1. Buy only what you need at the supermarket or grocery. It’s easy to pick up non-essential items prominently displayed in supermarket aisles. But those little purchases may add up to your grocery bill.
2. Switch to lesser known brands. From tissue paper to lotion and detergent, you can find good bargains with lesser known brands. In the grocery, look for these items below eye level. You may find good quality items at lesser cost. When it comes to clothes, choose lesser known brands or locally made ones which cost less. It’s not important if you are wearing brand name clothes or not; what’s important is who you are.
3. Plan your trip. Instead of going to the mall every week to buy school supplies, grocery items, and gifts, plan your trip so you’ll only go to the mall twice a month at most. This will help you stick to your shopping list and help you steer away from impulse purchases.
4. Identify your weakness and declare a moratorium in buying it. If your weakness is bags, for instance, commit to stop buying a new bag in the next six months. You can do it.
At the bank
1. Limit trips to the ATMs of other banks. Using other banks’ ATMs rather than your own bank’s ATM will cost you service fees.
2. If you have a loan from the bank, pay on time to save on penalties. And pay off all debt as soon as you can.
3. Avoid surprise charges. Some banks charge for every withdrawal made over the counter if you have an ATM savings or checking account. If you have a time deposit, know that if you withdraw before maturity date, you will be charged a penalty fee.
Others
1. Stop collecting bad debts. If you have personal debts that have been there for quite some time, determine to pay it off. It will hurt at first, but financial freedom is worth it.
2. Reconsider plans to do any major purchases. Talk about with your partner if you have plans to purchase a major appliance or a major item such as a car or home. Given the economic standing these days including high inflation, you might want to save instead.
3. Find ways of free or cheaper source of family entertainment. Read newspapers for announcements of free musicals, concerts, plays, car shows, and the like.
There are various ways to survive within your means without degrading your lifestyle. Get the whole family in on it and your budget will go a long way.
If you like this post, please subscribe to my RSS feed to get latest updates on this blog. Thanks for visiting!
| 2.5 |
