Easy Steps To Financial Management

We go to work, come home, pay our bills, and still keep asking ourselves the same question - "Why is there always so much MONTH left at the end of the MONEY?" So many well-paid people are living paycheck to paycheck and have nothing to show for their long hours of hard labor. If you think you can't afford that summer vacation or get that car repaired when it needs to be, think again. Here are some very basic money saving techniques that ANYBODY can do, no matter what your income level is.

1. PAY YOURSELF FIRST. These are words that you will hear almost every financial consultant say. The general rule of thumb is to set aside a certain percentage of every paycheck, or ANY source of income, and place it into a savings account. This must be done before paying any of your bills. Determine the average total of all your outgoing money (mortgage, rent, electric, phone, cable, etc.), and compare that with your total monthly income. Then pick a percentage of your income that you would feel comfortable about stashing away for a rainy day. A good rate to think about is 10%, however, if you can only do 5%, that's great too. The most important thing is to be very consistent, and make it a monthly habit.

2. KEEP TRACK OF EVERY PENNY - THEN REVIEW. A great way to cut down on unnecessary spending is to keep a written record of absolutely EVERY penny that you spend on a daily basis. No matter if it's a soda or candy bar from a convenience store, or a bag of chips out of the vending machine. Write down the item and the price in a small note pad. At the end of each week, go back and add up the total amount of money you have spent, and you will be astonished at the results. Review the items you have purchased, and make a decision about whether or not you could have done without it.

3. WANTS AND NEEDS...AND THE 48 HOUR RULE. Of course, we all know what our NEEDS are. Food, clothing, cleaning supplies, toiletries, gas for the car and lawnmower, etc. However, it's the WANTS that cause a lot of financial friction. Everybody wants something, but with a little self-control and discipline, you can be well on your way to building that little nest egg. See yourself walking down the street, and you suddenly pass a home decor store when a coffee table centerpiece catches your eye. You feel like you just have to have it. This is when the 48 hour rule comes into play. Instead of making the purchase on impulse, take a couple of days to really think about how much you really want that item. Surprisingly, most of the time you will decline on the purchase.