Taking on the household finances is a huge task. It not only involves making sure that all of the bills are paid on time, but also taking in account saving for the future, not to mention handling the spending money. If you take in account that the more you spend in each month, the less you have available for other things such as paying off debt or saving for the future. By making a few smart money moves, you can stay in control of the household finances.
Set Up an Emergency Fund
You may be plugging along now each month with making sure more money is coming in instead of going out, but what happens if your car needs a repair, or a household appliance needs to be replaced, or even worse, what if you lose your job? If you can keep a few months’ worth of expenses sitting in an account to use as a cushion, you could set yourself up in case of emergency and not have to finance on a credit card if you do not have the available cash at the time to pay for.
Take a look at last month’s credit card statement, add up all of the charges that are separate of necessary monthly expenses such as utility bills, grocery, or gas bills. Start by even looking at the amount spent going out to eat. If you even cut that in half and relied on eating and preparing meals at home, you could start to see the savings start to add up each month. Once you see the money starting to stack up, you could eventually hope to eat just about all meals at home for a fraction of the cost of going out.
Stay Out of Debt
Credit cards used to get a bad reputation, giving the impression that you don’t have the money to make the purchase so using a cash, but these days, using a credit card makes sense for the rewards, earning money back from each purchase, so using a credit card for every purchase actually makes sense. The problem is, if you can’t pay off the full balance and carries over to the next month you begin to get charged interest, which depending on the balance, could be quite considerable, especially if interest rates are pushing 16% APR, and therefore hurting other important areas where that money could be going.
Don’t Handle the Burden Alone
Since handling the household finances is a tough job, it’s good not to do alone. Bring in your significant other since you both are making and spending the money in the house, or even a family member or friend whose opinion you trust that could bounce ideas off to make sure that you are moving in the right direction for your financial freedom and have enough saved up life off of when you get of retirement age and leave behind the daily grind of having to go to work every day. The earlier you save, the better.