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- Family Budget
How to be a Smart Savvy Consumer
I have been a financial planner for close to thirty years and it still amazes me how individuals spend their money foolishly. A part of financial planning is keeping more of what you earn and spending less by being a savvy shopper and saver.
You will find numerous money saving ideas at Money $ense a guide to comparison shopping.
Consumer will spend time researching about almost anything except when it comes to their finances and especially their monthly expenditures.
The most important step to becoming a wise shopper is to keep a monthly budget on what exactly you are spending your money on and how much each month. Try to be accurate and detailed as possible.
I suggest you setup a spreadsheet or purchase money management software such as Quicken. There are also fairly good free budget tracking programs as well as templates for spreadsheet programs like Microsoft Excel or the free spreadsheet programs available from OpenOffice a Microsoft compatible suite of applications.
A handy resource for free Excel templates is Vertex42, a collection of budget related programs for both personal and business needs. Most recently they published a template for students to assist in maintaining a financial budget.
When settings up a budget don’t forget to pay yourself first which means you need to add to your budget categories a line for savings and/or investments. Try to save at least 10 % of your gross income and make the payment to yourself first before paying out any other expenditure.
After creating the budget begin the process of tracking your expenses, after three or so months you should begin to see your spending pattern. Now it’s time to do a comparison on what you spend versus the national average.
Depending on what country you live in, you should be able to find tables of data available online to make that comparison. Based on the comparison data try trimming those expense categories where you far exceed the norm.
A fast way to the poor house is to be eating out often whether it is lunches at work or dining out in the evenings. Keep separate accountings of groceries you buy to eat at home from other eating out.
The use of credit cards is extremely important in building wealth and maintaining a budget. Use credit wisely otherwise you will be paying for items today and many tomorrows to come.