Personal financial management is not as easy to obtain as it might seem. It takes determination and sometimes even will power to limit spending and actually saves money. This is an even tougher situation for those living on a low income. There is a light at the end of the dark financial tunnel and ways for low income families to get their finances under control:
*Live within your means. This is possibly the biggest obstacle standing between people and a balanced budget that works. It is so easy to get into financial trouble when everywhere you look, companies are offering “Low monthly payments” and “No payments for three months” and many other other too good to be true offers. Another trap is “Rent to own”. All of these offers sound great and in their own way, they are great, until you read the fine print. The interest is usually sky high and you are stuck making payments for at least six months if not longer. A good basic rule is if you do not have the cash for it, you do not need it.
*Create a budget, stick with it. It is pretty easy to sit down and figure out how much you make each month, and how much is going out in bills/necessities. It is a little tougher to be honest with yourself about where the extra money goes like the espresso every morning before work or the burrito you buy for lunch everyday at that great little place around the corner. All of these “little” things must be accounted for in order to have an accurate picture of where your money is going each month.
*Cutting corners. Once the accurate budget is in place, then you can look at it and figure out where you can eliminate unnecessary spending. This is a very important step for people living on a low income. You might be surprised at how much money you can save just by eliminating a few things from your budget. For example: you take the family out to the movies once a week. Instead, make the outing really special by going once a month. Instead of buying that espresso on the way to work, make coffee at home and take it with you each morning.
*Lower monthly bills. This can be accomplished by turning off lights when not in the room, not leaving water running when not right there using it and a host of other little things. You can even cut your grocery bill down by using coupons for the stuff you use the most, shopping at wholesale markets and by cutting down on the purchase of junk food (try making stuff at home, its fun and healthier). You can also try shopping at discount stores and second hand stores. The money you save here, can help insure that living expenses like rent, utilities and food can be covered easily.
*Prioritize. This is sometimes the hardest part of managing personal finances. You have to be able to put things into proper perspective and prioritize your monthly/weekly spending. In simple terms, if it is not necessary, then do not buy it! There is nothing wrong with treating yourself and your family once in awhile, in fact it is a good thing. Those treats become a problem when they are being paid for, but you struggle to pay the rent or buy basic groceries.
It is so easy to become overwhelmed by bills, unexpected expenses and the rising cost of living. These things can hit a low income family even harder. By cutting corners and setting a realistic budget, it is possible to get your personal finances in a more manageable state.