Managing your finances effectively can be a challenge in today's tough economy. The job market is very competitive and many people feel insecure about their futures. If your salary was reduced or you are currently looking for a new job, you might be living on a much smaller income than you are used to. While this can be an extremely stressful time in your life, there are a few ways you can manage your finances more effectively to get through it.
Track Your Expenses
When you are on a tight budget, it's always a good idea to write keep track of all your expenditures. Every dollar adds up. Keeping a record of your expenses will make you more aware of wasteful spending. You will learn to think twice about every purchase before making it.
You can carry around a small notebook. You can also make a spreadsheet on your computer. Find what works for you and stick with it. Keeping a detailed record of expenditures will also help you decide what you can save money on. It's a great way to understand how to effectively manage your finances. You can spot items that can be replaced with cheaper alternatives. If possible, cut out some expenses altogether. Every little bit counts.
Stick to Your Budget
You must create a budget and stick to it. Figure out how much money you need for necessities and bills. Give yourself a little room but not too much. If you don't set boundaries for your spending, you risk losing all your savings.
If you are looking for a new job, it's important to be prepared for being out of work for a long time. This might be scary, but you have to face the fact that it might be a while before you have steady income again. After working out a plan, you will feel more secure about the future. This is also important if you currently have a job, but your salary was reduced.
Being prepared for the worst might seem pessimistic but that doesn't mean it will happen. It just means that in case it does, you will have the resources to get through it.
Avoid Credit Cards
Don't use credit cards. Take them out of your wallet and put them away for emergencies. Charging things might be tempting because you don't have to make payments right away. However, this can catch up with you and you might end up in debt sooner than you think.
Managing your finances in today's economy can seem impossible, especially if you are living on a reduced income. Keep track of your finances, create a budget, and don't make unnecessary purchases. You'll be surprised how much you can save by using these quick strategies.
photo by Johnny Vulkan
I'd love to hear: Are you using any of these strategies right now, and how's it working for you? Share in the comments below or on the Wall at the Dream Big Coaching Facebook page!