Most households are loaded with bills to pay each month and families are wondering how you can begin a savings plan for an emergency and other unexpected high expense areas. In other words, where can you find that extra cash to put away for later?
With all the advantages that are evident from personal budgeting, it is little wonder that more and more households are beginning to rely on them to reduce their debts and to try and buildup their savings.
First, just remember that credit cards can cause a great deal of trouble for the owners. There are lot of purchases you could have avoided, if not for the plastic. The ideal solution would be to avoid the credit card and begin paying only by debit card, check, or even cash. Of course, you can always retain the credit card for emergencies.
Cutting Back on Spending
Mentioned below are few tips on savings.
This is a technique that most people practice, and it is useful for generating small change. What you have to do is to empty all your lose change into an empty can or a box at the end of each day. At the end of the month, roll the coins, convert them to notes, and put them into another box, your savings box. You would be surprised to note the amount that you will be able to save each month. Of course, any saving is a bonus, which can be used later. If you are going to use the savings from a previous month to spend in the following month, then you actually are not saving anything, but instead, you are just increasing your spending plan.
Try not to use your cell phone during peak times. Some people will spend quite a bit each month on cell phone charges. Avoid this by making most calls during off-peak times. Alternately, you can get a different service plan from your cell phone provider.
Go through the classified and advertisement sections of the Sunday newspapers. Clip some of those coupons and check out the sales. This may appear monotonous, but you will be surprised at the savings that you will be able to generate. Many stores will double or triple the amount of the coupon.
Refinancing – Mortgage rates have been extremely low over the recent years and hence this would be a good chance to reduce the monthly house payment by a significant amount. This procedure is particularly useful If you have any plans to have your house paid off before your retirement.
Insurance – Bundle your insurance, as many insurance companies will offer their customers lower rates if they purchase multiple policies.
Always keep in mind that small savings here and there would really begin to add up. Also, avoid the thought that changing your spending habits is not going to save you much money. You will be surprised, when it starts doing so.
Once you draft a savings plan, try, and adjust it whenever necessary. A savings plan is variable and is liable to change. Hence, it is important that the plan also change to reflect the adjustments. This is an important factor as it could give rise to some major deficits, if not attended to in time.
Of course, many people do not consider planning for holidays. Hence, sufficient funds may not be available for presents, food, entertainment, and other holiday expenses. Try and save a small amount for this category each month. So, when you go on a holiday, there would be sufficient funds for these categories.
Finally, many people include transportation and accommodations for vacations, but they underestimate money needed for entertainment, travel cost, food, and general spending money. Check the net to get the best rates and try to get off-season rates as well. Just note that most of these resorts are usually double to triple the standard rates.
What is most important is that you must learn to identify how to separate your immediate needs from your must wants.
Avoid Spending Pitfalls
When you go shopping, make a list, and take only enough cash to pay for what you have planned to buy.
If you think that you really need something or an item, try and give yourself a minimum of two weeks to decide whether it is possible to do without it, or whether it is something that is a must want.
Do not get disappointed or even discouraged should the savings plan fails or does not work. In fact, do not even expect to have a perfectly balanced budget within a month. These things take time and it would take at least three months, before you see some savings, as you have begun to understand the spending pattern. A savings plan may require constant revisions and editing, until it fits your needs. Then, make a habit to review it often, and ensure that you are making best use of every penny!