Penny-Wise-Pound-Foolish Personal Finance

Easy Ways To Cut Your Expenses in Your Personal Finance

Personal FinanceThere are a number of reasonable ways to cut down on expenses in your personal finance that make a difference in your bottom line but can ultimately cost you more both financially and emotionally in the long run than the savings are worth. Use the suggestions below to avoid small benefits in your finances at the cost of huge expense in your lifestyle.

If you find yourself running significantly short every month, it’s important to create a realistic timetable for yourself to manage big expenses rather than convincing yourself that you’ll be able to budget better if you stop spending two dollars a day on coffee. While two dollars a day certainly adds up to over $700 annually, it’s only going to yield you $62 a month so that if you’re running over budget by more than that amount you’ll have to do something else.

Stick to your timetable for managing larger expenses. If you decide that you’ll give yourself three months to stop running over on your budget every month, then on the very next day after the third month, you should look into selling your newer car to reduce a car payment and insurance coverage and purchasing a less expensive car, putting your house up for sale and purchasing a smaller house or looking for a roommate to share expenses. Waiting longer than a few months will leave you less time to make adjustments if paying your bills reaches crisis levels and will likely cause you to make hastier and more unwise decisions.

If something is important to the emotional health of you or a family member, do not consider it as an optional expense unless you’ve considered other expenses first. Whether it’s your child’s participation in a sport or your own habit of getting a pedicure or even the ownership of a family pet, don’t allow your cheap attack to ignore the emotional impact of giving up on these seeming extras. For children, especially, sports and after-school activities bring significant benefits including exercise, socialization, and the ability to schedule their time.

In the face of a crisis, spend the money you need to and figure out how to pay it back later. While this is a no-brainer, it’s important to note that if you’re sick or if some other unexpected catastrophe occurs you must take care of the event and worry about finances later because putting off action can ultimately cost more in the long run.

Managing Personal Finance Tips

Maintain health insurance policies but shop around for less expensive policies so that you’re prepared to make a switch when you can.

When you determine whether you can reduce your health insurance costs, consider whether certain savings are penny wise and pound foolish such as a savings of $20 a month for a policy that has a $7,500 deductible as opposed to a $5,000 deductible.

Begin cutting down on holiday spending from birthdays to seasonal holidays since these are enormous spending times of year.

You can manage holiday meal expenses by continuing to host holidays but introducing pot luck elements where you ask others to bring specific items to complete the meal.

Managing personal finance is not always best accomplished by watching every penny while ignoring large expenses. Use the suggestions above to manage your budget by managing expenses that can make a significant difference to your bottom line.