How to Manage Your Money More Effectively

In light of today’s global financial crisis, managing your money effectively has become more important than ever before. This is very difficult to do in the best of times. You do need to keep a check on your money so you know how much you have coming in each month so that you do have some left over for savings and for leisure after you pay all your monthly bills.

You may have has a budget in the past in which you allowed for all your outgoings. In recent months, though, it has been very difficult to stick to a budget with the increases we have seen in the costs of energy, petrol, home heating fuels and food – all of which are essential living expenses.

Homeowners are not the only ones that have to practice more effective money management techniques. Businesses have had to take a close look at their sales and expenses to find a balance between the two.

For both homeowners and business owners, the slightest rise in prices can overstretch the budget, causing them financial difficulty to the point where they are unable to meet their financial obligations. This is a very dangerous way to handle your finances because it means that you are deeply in debt.

You do not have to make significant changes in your spending and saving habits to see changes in the way you can manage your money more effectively. The first thing you have to do is take account of your debt. You need to know exactly how much you owe and whether or not you can meet the payments.

Start by making a list of your essential expenses – mortgage payment, loan payments, credit card payments, food expenses, heating costs, vehicle insurance and payments and the costs of petrol. Once you have these accounted for, then any extra money that you have can go towards paying for non-essential(不重要的) items, such as a new pair of trousers or new shoes or having dinner in a restaurant.

Learning to manage your money effectively also includes learning where you can make cutbacks(减少). If you eat out twice a week, for example, cut this back to once a week. Take a lunch to work with you rather than going to a cafe. Use public transportation or car pool to save money on petrol. Cancel any subscriptions to magazines that you don’t even bother to read. Look for cheaper rates on Internet, TV and telephone service. You will be amazed at how much money you can save in a month by engaging in these simple activities.

If you are overwhelmed by(受不起) debt, consolidation(合并) of your loans or credit card debt may be a solution for you. If you have a good credit rating you will be able to get a reasonable interest rate from a lender and combine all your debts, or least the ones with the highest rates of interest into one loan with one monthly payment. This payment is lower than the sum total of your previous payments leaving you with more money at the end of the month, with which you can enjoy a good lifestyle or pay down other debts.

It is worth your while to shop for lower interest rates on your credit cards. There are many credit card companies that offer low or no introductory rates for new customers. By taking advantage of such an offer, you can pay off the outstanding balance of a credit card balance that you transfer to this account by continuing to make the regular payment. In this way all or most of your payment will go towards paying down the unpaid balance.

Managing your money more effectively is not just to make sure you have enough money now. It also means making sure you have money for the future. By taking an extra amount of money each month that you can save by cutting back on nonessential purchase and paying it on your high interest debts, you will have them paid off a lot sooner than you expected. Then you have much more money to start paying on the next highest debt and in this manner you will become debt free. If an emergency arises during a month, you can keep the extra money for the emergency or use some of the money that you have paid off on a credit card balance to tide you over.

The careful use of credit cards and store cards is something you should keep uppermost in your mind. It is not an item that you should never leave home without – in fact you should make it a practice to leave these cards at home. This will prevent impulse buying(冲动性购买) which is what probably got you into such debt in the first place. By not having the card on you to buy an item that strikes your fancy, you have time to ponder(考虑) the purchase and ask yourself if it is something you really need or if it is just something you would like to have.