The bard once said that we should “neither a borrower nor a lender be”. And while that may have been shrewd financial advice for a playwright with loyal patronage in Jacobean times, it’s less well suited to the 21st century household budget. The truth is that there may come a time when unpredicted expenses- from car trouble or a leaky washing machine to a damaged roof or pipe trouble, threaten to decimate your household budget. And when this happens, we may seem to have no recourse but to resort to loans and credit cards.
And while these may be useful tools when deployed properly, the key issue is that of interest. Leave your debts unattended and they’ll start to rack up more and more interest, prolonging the debt and seeing you give more and more of your hard earned money to your lender.
But if you learn, over time, optimize your spending you’ll find it much easier to limit the non-essential spending (to which the average US consumer dedicated $18,000 of their annual income) and grow your savings.
Here are some effective ways in which to optimize spending and better balance your household finances.
It all starts with budgeting
Trying to stabilize your finances and optimize your spending without a comprehensive budget is like trying to build a house without a foundation. Download a household budget template (we wrote about how to draw one up right here) and make sure that you use it consistently. This will help you to crack down on the little costs that all add up to make a big difference to your disposable income levels. You’d be surprised at how much all those Monday morning Starbucks visits, Friday lunch time fast food trips and Saturday night meals out add up throughout the month.
Use an app to help you stay on track
Sticking to your household budget can be tricky. Fortunately, you live in an era where there’s an app for pretty much everything! Check out this Truebill review to see how it can help you to keep on top of your monthly spending and prevent your disposable income levels from becoming eroded throughout the week. It helps you to monitor your outgoing bills from utilities to streaming service subscriptions and helps identify areas of wasteful spending. According to its founder, it had helped save over $500 on average per year.
Plan your meals
If you started the new year on a health kick, you likely already know that meal planning is one of the most important ways to curb your spending as well as helping you to avoid the impulsively-bought treats that can derail your diet plan. When you allocate your weekly food budget to set meals throughout the week, it’s much easier to resist temptation and keep yourself physically (rather than financially) lean.
When you take the steps to optimize your spending, you’ll have a healthy kitty left in your savings so that when those unexpected expenses arise, they’re easily dealt with without the need to resort to borrowing (and the interest that comes with it).