Do you know where all your money goes? Do you know how much you bring home each month? Does your income cover your expenses or do you feel like you could always use more money?
Most unexpected expenses are things we’ve “neglected” in our spending plan. What are some expenses that always seem to cause stress for your family? Do you currently use a spending plan (budget) or do you just remember what needs to be paid and how much you spend?
In your spending plan, do you have a savings component? To reach your , it will require you to make some tough decisions. You may have to give up something to be able to reach your goal. However, saving money is worth it when you achieve your goal.
What is your plan to Save Money? Do you have a plan to address financial emergencies?
Let’s start off with finding out how to manage your spending and your saving plan. Do you:
$ Dip into savings to pay current bills?
$ Pay only the minimum due each month on charge accounts?
$ Delay payment of some bills you normally would have paid on time?
$ Borrow to pay for items you previously bought with cash?
$ Take out new loans to pay old ones or to get lower monthly payments?
$ Do not know where your money goes?
$ Have less than 3 months’ of living expenses in an emergency fund?
Even if you answered ‘yes’ to all or most of the questions, it is not hopeless. You must first understand that you have a certain amount of money available to you and learn to live within your means. The secret lies in knowing where you are now, where you want to be in the future, and making a plan to get there.
A successful spending plan takes time, commitment and involvement from everyone in the family. If you combine all of your family income into one account, then each person needs to know how much goes in and comes out from the account. Financial resources need to align with your income and goals. When figuring a spending plan, it is best to figure household income and combine figures to double check where your money is going each month.