Managing personal finances on a single income is always challenging. If you have switched from a double income, and have moved out of your comfort zone, you may feel as if you are under great financial pressure. Sometimes you may even consider that you are on the verge of going bankrupt. Therefore, it is better to plan your finances, and avoid the tension & stress related to financial pressure.
- The first thing to do is, start a discussion about money management with your spouse. Do not let the financial pressure build on you and crack your bond. Suggest setting limits on the ways of spending, and evaluate your expenses together. Work out on how to minimize the costs, and how to increase your family savings.
- Build a working budget around your income, and try to sketch your expenses in advance. Plan new commitments and include them in your prepared budget. You may plan for buying a new house, travelling, holiday expenses, or spending on education costs. Predict the future costs and make sure that your budget plan has got it covered.
- Try to save some amount out of your income before committing for the expenses as per your budget. For example, you can save 10 percent of your income as soon as you receive your paycheck, then set aside 35 percent for your household expenses; use 15 percent for any debts to be cleared, set aside 15 percent for transportation & fuel expenses, insurance, and maintenance, and use the rest 25 percent for utilities, daily expenses, and entertainment.
Maintain a good shopping habit. Prepare a list of required items at home, rather than dumping all the things in your cart, which you come across in the store. Make a list of required commodities for a week, and stick to the list. Try not to overspend on purchases.
Clear your debts on or before due date, to ease the pressure from lenders. Expand your savings account. Opt for a credit card with lower interest rate. Check all the aspects carefully, like annual fees, or any hidden charges. Be careful while planning for a loan, and check all the required documents vigilantly before signing the agreement.
Managing personal finances is very important, as you are responsible for all the consequences faced. Improper planning may lead you to critical financial state, because of your poor decisions. So plan your finances, and prepare an appropriate budget to lead a worry free life.