More than ever, people across the globe are being reminded of the importance of living within a budget. Although living on a budget can seem intimidating at first, here are a few simple things that any family can do to help them live within their means.
Like many newlyweds, when my husband and I got married, we didn't have much. For the first three months of our marriage, our sole source of income was what my husband made at his part-time job in the campus testing center. Needless to say, money was tight! That experience taught us so much about the principles of budgeting and money management. Today, we love using our budget. It keeps us financially strong, it also allows us to put money aside for emergencies and future expenses, and we can splurge on the occasional luxuries.
Living on a budget doesn't have to be confining! In fact, wise money management can feel incredibly free. Few things feel quite as good as knowing that you are out of debt (or working to free yourself from debt), with money set aside for the future!
Here are the few of the money-saving tips that we've learned along the way:
Live simply
More than anything else, my husband and I have found joy in living within our means when we do our best to keep our life simple. We've learned that there are plenty of things we don't need, and - what's more - it's easy to be happy living a life that is focused on activities and time spent together, rather than the accumulation of "things." Every family is different, and each family's "simple life" will be unique to them.
To start simplifying today, make a list of "extras" for which you are currently paying. Some examples: cable or satellite TV, high-speed Internet, frequent dinners out or fast food, a pricey mobile phone plan, or anything else that might not be necessary for your family's happiness. Sit down and choose one or two things to try going without for a few months. Remember, it's OK to budget for some "just-for-fun" items, and every family's needs and priorities will be unique. Still, you might be surprised by how much you don't miss some things!
Keep debt low
There are some things, like education, a house, a car payment, or an unexpected medical expense, where carrying debt may be necessary. Be careful in how much debt you accrue. If you use a credit card, try to stay well below your credit limit and pay it off in full each month. If you're considering going into debt for something that might not be strictly necessary, ask yourself if it would be possible to wait a few months before making that purchase. Try to save money forward for large expenses, rather than paying in installments or putting the charge on a credit card.
Buy used
You'd be amazed at the deals you can find! Many items depreciate in price immediately after purchase. It's often easy to find great prices on gently used clothing, baby items, furniture, and other necessities. Shop yard sales, local classified websites such as Craigslist.org, consignment and thrift stores, and global sales websites such as Ebay.com or Amazon.com. When you shop for new items, be sure to watch for sales and clearance items. Often, clearance prices can be as low as half of the original price - or less!
Make from scratch
Many people struggle to have a healthy diet while eating on a budget, but with a little creative thinking, it's possible! Try making soups, stocks, pasta dishes, and other things from scratch rather than buying pre-made. Replace a few of your meat-based meals with recipes that get their protein from beans. (Tip: it's easy to cook dried beans overnight in the crock pot and costs very little!). Experiment with new foods when they are in-season, when prices are lowest. Try making a few household necessities from scratch, too - you might be surprised at how easy it is to make homemade laundry detergent or skin cleanser!
Budget as a family
Sit down with your spouse several times a year to discuss the family budget and make any changes that might be necessary. Communicate with your spouse when you're contemplating a big purchase. As a couple, make a list of your financial priorities. This list might include things like saving for retirement, buying a house, putting money aside for car repairs, and having an emergency fund for unforeseen crises.
Most important of all find a budgeting system that works for you. Whether it's buying things with cash using the cash envelope system, keeping track of your expenses by hand, or using a budgeting tool like Mint.com, finding the budgeting system that is right for your family will make wise money management simple and fun!
