The following is a post from Jenna Smith. Consideration was received for the editing and publishing of this post.
Raising a family is expensive. That’s why it’s important for you to be able to manage your finances. If you find that you’re living paycheck to paycheck, or you’re regularly dipping into your savings to cover the cost of things, you need to take a look at your finances.
The first step is to take a hard look at what you’re spending money on. Track your expenses for one month. Once you see what you’ve spent money on, you’ll know where you need to cut back.
Sometimes we fool ourselves into thinking something is necessary when it’s actually not. There is a fine line between two, but that line is still distinguishable. Here are some clear rules for five categories families tend to spend the most money in:
Saving Money on Food
You can cut down on your grocery bills significantly by examining the way you grocery shop. Sometimes using coupons to shop isn’t enough. You may need to switch where you shop. There are many stores that offer brand name items for less than their competitors. Perhaps you can shop at one of those stores.
Money magazine offers 29 other ways that you can save on groceries. One of their suggestions is to look for substitutes. Instead of buying the name brand product, see if the store brand is comparable. Often times, the store brand will have the exact same ingredients as the name brand item, but it will be far cheaper. Most of the time the taste is similar to their competitor’s product, so you shouldn’t hear any complaints from your family.
Another suggestion is to eat before you shop. Studies have shown that people buy more food when they’re hungry. This is because they’re in an irrational state, so they are more likely to spend money on items that aren’t on their list.
Save on Clothes
Name brand clothes and shoes are not cheap. You can save money on both by shopping at thrift stores or outlets. Outlets usually take their overstock and sell them at discounted prices. Almost all name brands have an outlet, so if there is one near you, take advantage of it.
You can find nice quality clothing and unique pieces for a steal at thrift stores. It is not unusual to find an expensive item for pennies on the dollar. You can also find your basics, like t-shirts, tights and socks, for cheap in thrift stores too.
The most important rule, though, is don’t buy something just because it’s on sale. Not unless you absolutely need it. This may be a hard habit to break, but sticking to your needs can save you hundreds of dollars a year.
Downsize If You Can
How much are you spending on rent or a mortgage? Can you possibly move to a smaller place and still be comfortable?
I know it’s a touchy subject for a lot of families. We want our children to grow up in big houses with nice yards that they can play in. But if we can’t afford those things, or they are becoming too difficult to pay for, it may be time to downsize.
It may be completely out of the question for some, but if you can consider it, you should, especially if your family doesn’t need that much room in the first place. You can literally save thousands a year if you move into a smaller place.
Of course, that shouldn’t be the only reason you move, and moving is a family decision. Discuss it first. Make sure it’s a viable option before you commit to it.
Bundle Your Insurance
Insurance is necessary for every family, but the type of insurance you have may need to be re-examined. If you have several different insurance providers, see if you can bundle your insurance. Most providers will give you discounts if you get multiple types of insurance from them.
This applies to medical, dental and vision as much as home, renters and vehicle insurance. Even less-common packages like motorcycle insurance can easily be combined with car and house insurance to create discounts in the hundreds. It’s also easier to go through one provider for your insurance than it is to go through two or three.
Following these guidelines should help you save a significant amount of money a month. Even if it’s only $50, that’s an extra $600 a year.
Be sure to spend your saved money wisely. Remember, the goal is to manage your finances responsibly. Extra money shouldn’t be spent frivolously. You have to stick with your new financial habits in order to be successful.