This may seem like an easy question to answer but the sad fact is that most people think that just because they aren't bouncing checks that their budget is working. This couldn't be further from the truth. The point of a budget is to help you reach specific financial goals you have set for yourself. In the following article we are going to discuss some the ways to ensure your family budget is really working by showing you some ways to periodically check your budget.
Firstly when setting up your family budget it is advisable to create checkpoints. These checkpoints should be set up with your goals in mind. So if you decide that you want to save up to buy a new car in 6 months, the you would create monthly checkpoints to ensure that you are on course to reach your goals.
Secondly, make sure that you are setting realistic goals. Don't create a goal to buy a new car in 6 months if it just isn't possible for you to save enough money. For example, if you make $2000 per month and you only have $200 left over at the end of the month, it really isn't possible to save more than $1200 in 6 months time.
Lastly, make some cutbacks. Take a hard look at the where your money is being spent. You will be surprised where your money goes. You will be amazed at the different places you can cut back spending in your household budget. Most people don't realize that eating out is a huge money leak in a home budget. It is easy to spend $10 a day on fast food which equals $300 per month or $3600 per year. That is a down payment on a new car.
As you can see these are a few simple ways to ensure that you budget is functioning on all cylinders. The most important thing you can do to ensure that your family budget is working is to stay on it and consistently checking it. After a few months, it will become habit to do these things and before you know it, you will accomplishing your financial goals!
Mo Conley is the author of Setting Up And Maintaining Your Family Budget which walks you through setting up a budget for maximum results. For more information on how to create a budget personalized to you: Creating A Family Budget
Debt Consolidation - A Popular Purpose For A Secured Loan
Credit has become a way of life for many people in the UK. Secured loans, unsecured loans, credit cards and store cards are commonplace and the amount of credit that exists, may be at different rates of interest. Some of these loans may be subject to comparatively high interest rates. It is understandable then, why so many decide to consolidate this credit into one more manageable monthly repayment.
Only One Repayment, And Cheaper Too!
Rather than have several cheques to write or direct debits to set up, many people decide to consolidate their debt into one loan which means only one payment to organise. But the advantages of having only one loan don't stop there. Had you thought that by consolidating your debt, you may be able to pay off your exisiting credit that incurs comparatively high interest charges into one where you pay a lower interest rate? You may also decide to pay this new loan off over a longer period, which means that your monthly repayment will be lower than with your existing credit agreements. You must remember however, that this may mean that you end up paying more interest over the longer term than at present, but for now at least, it could make it easier to meet your repayments each month.
What? No More Telephone Calls And Letters?
If you have lots of creditors chasing you for their repayments, a debt consolidation loan could solve these temporary problems for you. By taking out a debt consolidation loan, you can use the finance to pay off the existing creditors and earn yourself some breathing space. No more harrassing calls, chasing their money!
Many people opt to organise a debt consolidation loan by releasing some of the equity in their home. Effectively, they are taking out a secured loan which as is suggested by the name, in the event of a default, the lender could enforce the repossession of the property in order to get hold of their money. You should always think hard about whether you could afford the repayments but in real terms, isn't this what you wanted the debt consolidation loan for in the first place?
By taking out a debt consolidation loan, you could enable the lender to secure the new loan against the value of your property, and by so doing, the loan may attract a lower interest rate than you may have done with an unsecured loan. This of course, only applies if you are a homeowner and have enough available equity in your home. For tenants, there may be different options where you could still have a debt consolidation loan but by taking out an unsecured loan instead.
Debt consolidation loans are relatively easy to apply for these days. There are also many lenders and finance brokers in the UK that offer this type of facility. You could make an online enquiry in seconds and potentially have an offer within minutes. Of course, you will still need to complete and sign a credit agreement and your chosen lender may require proof of ownership of your property, proof of citizenship etc and they may also need to request an independent valuation so the whole application process may still typically take between 4-8 weeks.
Always make sure that you read and understand the terms however, and make sure that your new loan is as affordable as you need.
Andy Silk is FinanceGuru at FeelGoodLoans.co.uk, specialists in all types of loans and mortgages for UK homeowners and tenants. Visit for more articles.
Why you should save and save with a purpose.
As you journey through life, you will surely notice how people’s fortunes follow divergent paths. The difference in financial circumstances between people from the same background can be shocking. Some become rich and comfortable; others just manage while many become poorer. Some own beautiful homes while some fight loosing battles with landlords.
The children of the wealthier ones have more resources at their disposal and hence end up studying in the best universities while for those of the less successful lot; such education remains an elusive dream. The main reason for the difference in destinies is that some individuals never take the first step towards building a firm financial foundation – saving. An individual who does not save is bound to have numerous financial difficulties in future. Just like the person who spends more than he/she earns (courtesy of credit cards or loans) is bound to end up in a major financial crisis.
Given that saving is necessary from both the personal and national economic perspective, why then do many individuals consider it an exercise in futility? Has the concept of saving money has become irrelevant? Why are people so discouraged? There are many reasons and they have to do with the frustrated perception of the saving process.
How many people can deny themselves the pleasure of using a substantial part of their income? How many can do it for a reason other than to buy an electronic gadget or a gift for a loved one? Very few, reason? Many individuals have unnecessarily high standards of living influenced by a need to fit into a certain social class, usually influenced by friends and society. What these people seem to forget is that good things come to those who wait.
Saving requires a substantial amount of sacrifice; it might not be easy to deny oneself the pleasurable things in life. But it is a sure way of ensuring a sound financial future free of debt and full of joy.
How is an individual expected to cope with daily living expenses and also make sure that the future is secure by saving? The prices of goods and services are always increasing, despite the fact that income might have stagnated. This compounded by the fact that many jobs are not secure and disaster often strikes at the worst possible moment – like falling sick and numerous other unexpected expenses. You should keep in mind that individual’s productive years are exhaustible and retirement will sooner or latter come knocking at the door.
To get some motivation to save, think of the various things you can do with your savings. Articles in magazines are full of praises on stock market initial public offers and have numerous success stories to back their allegations. Others say unit trusts are the way to go, while some talk of insurance products. There are those who will favor bank fixed deposit accounts, treasury bills, treasury bonds, corporate bonds and so on. To other individuals, buying land and subdividing it is the silver bullet that can solve your financial problems, yet others will talk of ‘solid’ investment schemes that multiply your monthly input faster than you can say “pyramid” or “ponzi”. The entrepreneurs will always swear that they would rather invest in business, where they can make a killing, not to mention those who abide by rental real estate.
All this probably leaves you confused. You need to have some form of motivation towards saving. Come up with investment or business ideas and consult professionals in the field to unsure that your objective is ideal. Do not save for something you have no faith in.
To summarize the root to your financial independence come up with a personal financial plan, a systematic process of managing your financial resources so that you utilize them in moderation so as to leave some for future investment.
Determination of current financial position
If you don’t know where you are, you cannot plan how to get to where you want to go. Ones financial position is best clarified by calculating their net worth. Net worth is the difference between ones assets and liabilities.
Setting of financial goals
These goals must be specific, measurable and realistic given ones resources.
Income management strategies aimed at achieving the goals you have set:
Among the keys to strategic income management is a written personal budget. You cannot manage what you cannot measure. Without a budget, you cannot measure how much you are spending on what and consequently you end up saving nothing.
Investment plan
Money simply sitting in a bank account is wasting away since inflation is higher than the interest paid by the bank. You must, therefore, decide how too invest your savings.
Personal risk management
Finally, you must implement your plan and review it regularly to ensure it remains relevant to your changing circumstances.
You can customize your plan to suite your personal needs. If you can afford it, retaining a qualified, independent financial adviser can be a good option. One thing is for sure though “You” decide your financial future so why not make a personal financial plan so that you set a conscious well informed goal and work towards it in a pedantic manner.
Paul is the owner of a site that deals with articles on globalization like advantages and disadvantages of globalization in Africa and numerous other articles on globalization and the African continent.
