MANAGING YOUR MONEY IN GOOD AND BAD TIMES

With the economy weakening, it is a smart decision to control your spending. But if you or other members of your family are facing difficult times financially, perhaps from a job loss or wage cuts, it is especially important to spend less so you can have more money to pay essential bills or to add to a savings account you can go to in times of emergency.

A good way to get started with cutting back on your expenses is to pay more attention to your spending. The first thing you need to do is think about creating a spending plan or budget. Make a list of your monthly expenses and divide it into two groups — NEED and WANT

Need and Want

The “needs” are expenses that are necessary, such as your housing, utilities, clothes, food and transportation. The “wants” are optional purchases. After differentiating between spending for needs and splurging on wants, you cut back on the second category, especially if you’re already suffering an income loss or other financial hardship. The possible places to cut back on unnecessary spending includes restaurant meals, monthly subscriptions and premium TV channels.

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But you should also consider opportunities to save on your necessities. Like taking public transportation to work instead of driving by yourself, try living without some of your cars if you have multiple cars, buy less expensive non-essential commodities like shoes and clothes instead of expensive ones. Take better care of what you buy so it will last longer. And, bring your lunch to work instead of eating out.

Finally, don’t use your credit cards or other loan products to buy things you really can’t afford.

In conclusion, cutting back on an already tight budget may seem daunting, but you can find ways to spend less without sacrificing your quality of life.