Article provided by Debt Rescue
While we all look forward to payday, it seems to come and go too fast, leaving us penny scraping through the month until our next pay cheque. Living from pay cheque to pay cheque may make it difficult to save money or, even worse, cause you to slip deeper and deeper into debt as a result of struggling to keep up with expenses.
Break this awful spell now by following our simple, yet effective money management guidelines.
Start by assessing your incoming money
What are you working with: one household income? Two household incomes? Calculate the exact net incomes received by your household and then subtract your monthly payments and debit orders, including medical aid, personal loans, cell phone bills, credit cards, water and electricity, bond repayments, and so on…
Before you spend any leftover money, make sure you save a portion of it. 10% of your salary is a good starting point. Don’t trust yourself to save any “leftover” money at the end of the month – this hardly ever works!
Set and stick to your money goals
If you don’t have any money goals, it’s time to set some. Whether you want to finish paying off a loan, put down a deposit on a new car, start a family, save for a decent retirement or start an education fund for your kids, you need clear goals to motivate you to put away money. Once you have determined your financial goals, make sure you stick to them.
Live below your household income
Living a little more frugally will make it easier to put away money every month and make it easier to reach your next pay cheque a little more comfortably. You may need to make some lifestyle sacrifices but, in the long run, you will avoid financial stress and secure a better future for you and your family.
Don’t be afraid to say ‘no!’
While you may be tempted to go out with friends or buy your child a new toy they really want when you can’t afford it, learning how to say ‘no’ can help you stick to putting away money every month and making it to your next pay cheque without taking out any debt.
Set up an emergency fund
Emergencies happen. It’s up to you to make sure you put money aside for unexpected events, such as car repairs, trips to the doctor, broken appliances, etc. Make sure you replenish your emergency fund if you use it and avoid using it for everyday expenses. This will minimise financial stress and ensure you don’t spend money you don’t have.
Avoid going into debt
Once you fall victim to debt, it is very difficult to get out of it. Make sure you follow the tips above to stay clear of debt. If you are in debt, make a conscious decision to get out of debt as fast as possible.