From picking your first house sign to managing your new financial duties, everything can be stressful. While some parts of the process might be easier to approach, others need a lot of planning and organizational skills. Remember that no one is born with money management skills. Those are acquired skills by the time we are adults. Keep reading below to find out more on how to manage your home finances on a shoestring budget.
How to Manage Your Home Finances on a Shoestring Budget
Tailor a financial plan that works for your family
Having a mortgage is certainly more financially demanding than monthly rent is. This is why you want to make sure that you start your homeowner journey with a sturdy plan in mind. There are certain templates of financial budgeting plans that you can follow and they work amazingly.
It can help you learn how to save money and budget your family’s finances. Financial planning on your part can help create habits that will help you achieve a debtless life as well as financial stability and independence. For instance, if you can’t afford to set up that luxurious home sign that you dream of, it may be wiser to choose an affordable but beautifully designed one.
The market is full of flexible solutions, sign design companies like Signomatic being able to deliver products that meet both the aesthetic variable and accessibility one. Expensive is not necessarily better, especially for your financial freedom. Besides, you don’t need a luxurious home sign, you need a functional and aesthetically-pleasing one.
Learning how to be financially responsible means that you are capable to systematically and successfully check the following boxes, monthly.
- You pay your monthly bills on time;
- You comfortably pay for your living expenses;
- Your mortgage is at a manageable level;
- Save for perks that make your life even more enjoyable;
- You’re not money anxious.
Technically, it’s not about how much you make, but how much you make out of that money. The tips and tricks below will help you in the process.
Setting goals for your household finances means that you have to identify what is important to you, before starting to actually manage your money. Start by putting down on a piece of paper or planner what expenses are really important for your household. Some of your goals might include the following.
- Paying off your credit cards;
- Contributing to your savings account;
- Applying for a personal or business loan;
- Saving money for a potential car down payment;
- Setting a budget for travel purposes
Remember to set clear, realistic goals when figuring out how much you need to save and for how long. After that, you need to figure out where that money will come from, on a monthly basis. For most of us, meeting our financial goals simply means that we put some money aside each month.
Figure out your income and expenses
After you establish some clear financial goals, you have to figure out where the money for meeting those goals will come. For the best results, you want to track your income and expenses – and then, figure out how much you can squeeze in for a little extra to meet your financial goals. For beginner budgeters, this will be a difficult task. Most people know exactly where their money comes from, but are clueless where they go. If you’re like most people, make sure that you try to track where your money goes, first of all. Try to split your expenses into daily, weekly, monthly and annual. This will offer you insight into your spending habits.
Keeping track of your expenses should be done with the help of a money management app, spreadsheet or even a planner if you’re the type of person who prefers writing things down the old-fashioned way.
You can also manage your home finances by keeping track of what you spend. As you start to track your spending habits, you will notice that not all your expenses are directed to things that you or your family needs. Like most people out there, you might end up impulsively purchasing goods. People, generally, spend impulsively due to a series of reasons: they’re in a good mood, they want to reward themselves for an accomplishment and so on.
Discerning between necessary expenses and impulsive expenses is a great way to lower your financial stress levels and accomplish more of your set goals.
Create a Budget
In order to manage your home finances, you will need to create a budget. Creating a budget is usually seen reluctantly by many of us. Most of us think about limiting our expenses to bare necessities. However, a budget will allow you to live within your means, without overspending and potentially setting money aside to meet your financial goals. Before proceeding, you must, however, make sure that your expenses are not exceeding your income.
For those struggling with financial difficulties, living on a shoestring budget, this makes the difference between a comfortable lifestyle and financial disaster. Planning for unexpected events and expenses should take a column of your monthly budget plan. This will allow you to avoid getting into debt because of said unexpected expenses.
Emergency savings should accumulate three months-worth living expenses. They will allow you to live a debtless life even if you lose your job or unexpected medical bills appear. However, exceeding the recommended amount won’t hurt anybody. If you’re able to save more, do it.
To successfully put your plan into action after you created your budget, create a monthly expenses schedule. Specialists say that using the Pay Cheque Planning Worksheet will help you stick to your goals. It can also help you focus on your expenses. This particular method works even for those with an irregular income. However, you will have to plan in more detail for each expense in your household.
There are also certain expenses that you shouldn’t take into account on a monthly basis, but they are, nonetheless, relevant for your money scheduling strategy. For instance, plan ahead to take care of car expenses before harsh winter months if you can afford it. Do the same for all seasonal expenses, including your Christmas present buying process.
It can be easy to manage home finances on a shoestring budget when you stay focused on your financial goal.
How about you? Are you ready to manage your home finances on a shoestring budget?
AUTHOR LaTia Longuemire
My name is LaTia Longuemire. I enjoy writing, singing, and cooking in my spare time. My passion is helping others. At this stage in my lifetime, I'm primarily focused on my children. They are everything that keeps my world spinning.