It seems like a good portion of our society is obsessed with always having the latest and greatest consumer goods. In these hard economic times, the "got to have it now" mentality coupled with the recent downturn in our economy is a bad mix that should be avoided. Listed below are basic and sound financial principles that, if taken to heart, can foster peace of mind and even good health (lower stress, lower blood pressure, and less anxiety).
Create a Budget and Stick to it
A budget should be common place in any family financial plan. It can help prioritize and ensure that the essentials (food, water, shelter) are taken care of and not neglected. Track your expenses for the month and use that information as a guide to creating your budget plan. Categorize expenses, then allocate. Or in other words, determine how much will be spent on food, transportation, housing, etc. Once a budget has been established, be disciplined and encourage family members to stick to it.
Avoid Debt
Excessive debt should be avoided at all costs. Homes, cars, education may be considered the exception. Get in the habit of spending less than you earn. If you are already living beyond your means, take action and make a change. Consider the following questions with every purchase, "Is it within the budget?" and "Do I really need it?" Save up for big ticket items. There is great satisfaction to be had in a free and clear purchase. If you have debt, pay it off as fast as possible.
Start a Reserve
Saving money for many has taken a back seat to the prospect of instant gratification and the "buy it now, pay for it later" mentality. The end result of such thinking can lead to misery. Putting away a small amount of money on a regular basis can over time pay back great dividends and provide long term safety from the inevitable ups and downs of the economy.
Educate Family Members
Include your children in family financial matters. Teach them the value of hard work, budgeting, saving and education. Lead by example.
Create a Budget and Stick to it
A budget should be common place in any family financial plan. It can help prioritize and ensure that the essentials (food, water, shelter) are taken care of and not neglected. Track your expenses for the month and use that information as a guide to creating your budget plan. Categorize expenses, then allocate. Or in other words, determine how much will be spent on food, transportation, housing, etc. Once a budget has been established, be disciplined and encourage family members to stick to it.
Avoid Debt
Excessive debt should be avoided at all costs. Homes, cars, education may be considered the exception. Get in the habit of spending less than you earn. If you are already living beyond your means, take action and make a change. Consider the following questions with every purchase, "Is it within the budget?" and "Do I really need it?" Save up for big ticket items. There is great satisfaction to be had in a free and clear purchase. If you have debt, pay it off as fast as possible.
Start a Reserve
Saving money for many has taken a back seat to the prospect of instant gratification and the "buy it now, pay for it later" mentality. The end result of such thinking can lead to misery. Putting away a small amount of money on a regular basis can over time pay back great dividends and provide long term safety from the inevitable ups and downs of the economy.
Educate Family Members
Include your children in family financial matters. Teach them the value of hard work, budgeting, saving and education. Lead by example.
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