Don't have much money? Don't worry!
Do you earn enough to support your lifesyle?
Times are hard financially speaking and record numbers are unemployed or are receiving wage increases that fall below the rate of inflation whilst the cost of living continues to increase. Given these simple facts it is a prudent question to ask yourself "Do i earn enough? below we will discuss ways to identify and address this problem.
The Number 1 sign that your income cannot support your lifestyle.
The following is merely common sense however without being prompted how many of us over look what seems obvious when reflected upon in hindsight.
Your Average bank account balance reduced each month or you are becoming further and further overdrawn. I speak from experience when I state that this is a trend that is easy to overlook. When I was formerly in the banking industry one of my jobs was to monitor bank accounts for what we referred to as deteriorating trends. A deteriorating trend would be identified as when A customers outgoings begin to consistently outweigh their income therefore gradually (or not so gradually in severe cases) reaching a point at which the ability to pay essential bills will be become compromised. It is critical to monitor these trends and identify them sooner rather than later. Many financial institutions will offer you more assistance than you would imagine if you approach them before you reach breaking point. Always remember it is in their interests to help you as they want to be paid for any debts or services and the best way for them to achieve this is by assisting you in any way they can. Bank's get a lot of bad press, much of it deserved but do not let this stop you from asking for help.
Other Issues include - Obvious but often overlooked.
1. Over reliance on credit cards for essential bills.
2. Reliance on friends and relatives for financial assistance.
3. Returned or bounced payments.
4. Counting down to pay day or arrival of funds.
Ways to save and stop the deteriorating trends
1. Spend Less.
This I am sure may sound a little trite and obvious to many but it is something many of us do not do even when finances demand it. Identify what purchases and spending are not necessary and eliminate them where possible.
Where Money can be saved.
- Charitable giving. It is nice to give to charity but you have to consider if you can afford it, do not give money away at the expense of your own financial needs.
- Subscriptions. Do you buy magazines on subscriptions, it can prove to be much cheaper than buying in store or from newsagents and news stands. If you can manage to live without buying the magazines at all do so, if you have to have it for whatever reason consider a subscription.
- Books. Reading can be an inexpensive way to pass the time, but the cost of books can mount up overtime especially if you are an avid reader. If you buy one book a week over the course of year that could be a mortgage payment. Consider libraries most of us have one locally and it can save you a lot of money.
- Gifts. Do not be over generous, yes we love our family and friends but it would cause them distress to see you lose your home or to be without life's essentials and will understand if you do not spend large amounts of money on gifts. Make a present of buy something within your means. It often means more.
The above list could go on and on the purpose of those I have listed above is merely to give examples of simple ways to save. Think about the list and you will identify many more ways to save money that you may not have thought about.
Keep track of the little things
Do you rent movies every week, do you buy snack foods every time you call into a shop/store? As an experiment for one week write down everything you spend and total it up and consider ways to save further.
I am UK based so I will use Pounds Sterling for the purposes of this example but the principle remains the same in any currency.
One simple example of money that can be saved.
I drink coke, lots of it. for the sake of my teeth and weight I try to be sensible and limite myself to around 6 cans a week.
Six Cans of Coca Cola bought individually - Cost £4.32
Multiply over a year and that is almost £225.00.
The same six cans purchased from a supermarket is approx £2.00 often cheaper if bought in larger quantities.
That offers a saving of £120.00 annually, now think how many hours do you work to earn that money?
- Make your own sandwiches.
- Repair Clothing and shoes.
- Don't use the car, walk when possible.
- Don't waste food, buy only what you need.
- Don't buy brand name clothing. It is seldom any better than non brand name and quickly goes out of fashion anyway.
- Allow a budget for daily spending and stick to it.
- Cook for yourself rather than eating our and ordering food in. With a little effort it can taste just as good and save a lot of money.
So you regret your pruchases and wish you had saved instead?
Bargains and shopping around.
Most of us love a good deal or a bargain, this is not to say you should buy something just because it is one. What is your compulsion. Mine is and has been DVD's I love them love buying them and love amassing a large collection. I have around 1200 DVD's and I love my collection, I do not however love all the films. A recent cataloging exercise brought my attention that over half of my collection is films I do not like very much and have never watched. I bought most of these films because they were on offer or were part of a deal. I fell for the oldest trick in the book, make it cheap and some fool will buy it. I am that fool!
Remember it is only a good deal if you need or want it, don't make my mistake and buy things just because you feel it offers good value. That however should not put you off searching out those bargains. For the purposes of making my point I will stick with DVD's but this can be applied to anything.
Step One. Do not assume!
Often people assume that somewhere that has a good reputation for cheap prices may be the cheapest. DVD's for example can be bought second hand on ebay for just a few pounds but check retailers too. Often less popular titles will be even cheaper brand new.
Step Two. Wait!
Currently I desperately want to buy "Drive" the Ryan Gosling starring movie on Blu Ray. Here in the UK it is currently retailing anywhere between £11 and £15. As much as I want to buy it I also know if I wait a month or perhaps even less it will be eclipsed in the charts by new releases and will drop substantially in price.
Step Three. Ask, do I really want it?
This one really does speak for itself. If you can stop and ask yourself before handing over your hard earned money "Do I really want/need it? you will amaze yourself how many items you will choose not to buy.
Being frugal is not something most of us would choose to do given other options for most of us it is a choice we are forced into by financial circumstance and money worries. But once you have adjusted your lifestyle and adopted the frugal way of doing things it does become a natural habit and does not feel like we are being punished.
It is not all doom and gloom, having less money helps us find ways of enjoying ourselves that are not reliant on having lots of money. Just to finish on a brighter note here is a list of a few great inexpensive if not free ways to have fun.
1. Exercise - You do not need an expensive gym. Go for a run or a walk, it feels laborious at first but soon becomes a pleasure.
2. Sex! I will not elaborate here.
3. Cook for friends and family.
4. Read library books.
5. Volunteer. You may not be able to donate your money at the moment but often your time is worth far more and you can get a great sense of well being.
7. Be creative, paint, draw, write! You do not have to be enormously talented but if you are it could prove to be financially beneficial too.
8 Make conversation. Ok so the TV might cost very little, but conversation is free and often far more interesting and fun than TV and movies.
I used to be financially well off and spent a lot of money on things I did not want not need. Now that times a harder for me financially I wish i had been more frugal then. But I do not miss the fancy car nor do I miss my name brand clothing and enjoy the simple things so much more. Do not misunderstand me, I want more money and lots of it. But I have learned to live for less.