If you are fortunate enough to have your grandparents around, talk to them about saving money. You will probably learn about how frugal American consumers used to be, and how older generations went out of their way to save money and avoid excessive debt.
All of that has changed over the past couple of decades. Once known for being frugal people, most Americans today don’t even have enough money saved up to pay for a $500 emergency expense. However, because we have so much information readily available to us, and since so many of us have dealt with financial problems in recent years, we all know that it is important to change our financial habits in order to have brighter financial futures.
It all comes down to managing your money. Sure, it is easier for people who make a lot of money to save more, but even that doesn’t always happen. There are plenty of folks out there making a lot more than $100,000 a year who still live from one paycheck to the next. On the other hand, there are lots of households that fall into lower income brackets that manage to save money for the future and for emergency expenses. What’s the difference between the two? The people – regardless of their income brackets – who save money regularly are those who know how to properly manage their finances.
You don’t have to be an accountant or high level executive to be a better money manager. It just takes drive, a little discipline and having the right tools at your disposal. Here are some tools that you can use to start managing your household finances more effectively.
A Budget Application
There are lots of free or affordable budgeting applications available online these days. Creating and sticking to a budget help to create the foundation of financial success. Your budget will serve as your monetary roadmap. It helps you to see how much you bring in and how much you spend every week. You don’t even need to use a high tech budgeting tool if you don’t want to. A simple spreadsheet or even a notebook can suffice. Track how much comes in, and list every expense that you have. Subtract the expenses from the income, and you will hopefully have some left over. If you don’t, it is time to start eliminating unnecessary expenses in order to make sure you are in the black. That money can then go into a savings account to start earning interest.
If you want a fancier, online budgeting tool, you can check out mint.com. This website is used by millions of people to create realistic budgets that they can track from any computer or smartphone.
Emergency Savings Calculator
Since the emphasis here is to start saving money for emergency expenses that you will likely encounter, it is important to have a tool that helps you do this. A website called HelloWallet.com features a handy calculator that allows you to plug in some basic financial information to get their recommendations on how much you need to save up for emergency, minor and major expenses that might come up. This site does not ask for any personal information and it doesn’t cost a dime. This calculator can help you to create money savings goals for your future financial needs.
Use your household budget along with the emergency savings calculator to get on the right financial track. Saving money is something that you slowly do, over time. You won’t have a fortune amassed overnight, but by taking action now, you can have an impressive savings account built up before you know it.