In our modern economy, many people have complained that they have had trouble finding a job. Indeed, jobs are scarce which means that money is scarce.
Many people have had to make due with living on a much smaller budget than they are used to. Doing this can cause much financial stress within a family.
Financial stress is not pleasant to go through. Nobody wants to be labeled as poor or to live in poverty.
However, sometimes this is just what happens to people. It is truly unfortunate what it does happen.
It’s Now How Much You Make…
What many people don’t realize is that they do not need to make lots and lots of money to have the things that they need. They can rearrange and reorganize the money they are currently making so that they can make ends meet.
Many people do not know how to make a budget, and this is one of the main causes of their financial stress. Here are a few tips on how you can better manage your money.
Try the Envelope Method
One of the things you can do is to create an envelope system that will aid you with your budgeting. You will need to gather several envelopes and label them with the categories of your budget.
For example, one envelope could read “Food.” Another envelope could include “Rent”, and so on.
Continue to label the envelopes according to the categories that are relevant to your life. You may be wondering what you are going to do with these envelopes.
What you do is withdraw the cash amount from your bank account that feel will cover your needs in each specific area for a month. The point of this strategy is that you can only use the money in the envelope that you have allotted for each category.
Once you run out of cash for a specific category, you cannot spend any more money in that category. This strategy helps you see how much money you need for each category; it also teaches you discipline because you cannot buy every single thing that you want to buy.
Only Buy What You Need
This strategy additionally helps you to see how important it is to buy the necessities and essentials first before you spend your money on extra things that aren’t as essential. Many Americans have the problem of buying things that they don’t need.
This is a problem because they oftentimes buy things they don’t need instead of buying the things that they do need. One of the reasons why so many people struggle with this is because while they’re considering if they need to buy something or not, they convince themselves that the item is something that they need instead of something that they just want.
People oftentimes have a hard time distinguishing between wants and needs, and they don’t realize until later that the thing that they bought may not really have been a need. It is important to not get too angry with yourself if you buy a lot of things you don’t need, however.
Learning to distinguish between wants and needs come with time, experience, and practice, just like everything else. Be gentle and kind with yourself while shopping and you will learn eventually.
Another great way to discipline yourself financially is to match whatever you spend on nonessential indulgences and put that in your savings account. For example, if you spend $50 on a new shirt, make sure that you can put $50 into your savings account.
If you don’t want to do this, than you shouldn’t buy the $50 shirt. This method does not work for everyone, but for some people it is just what they need to discipline themselves while in a store.
How Much is Too Much
Another great way to establish a savings discipline is to take the amount an item costs and to divide it into your hourly wage. For example, if you want to buy a $50 shirt and you make $10 an hour, that would mean that you would work for 5 hours to be able to buy that shirt.
The question you should ask yourself is if that shirt is worth five long hours of work. If it is, then go ahead and buy it.
If it’s not, then you would probably be better off spending that money on something else. As mentioned above, it is your money and you get the final say as to what happens to it.
Just make sure that you are wise with your money, otherwise you will see it disappear very quickly.