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Family finances: Living on a budget

Česky: Kreditní karty Deutsch: Kreditkarten En...Image via WikipediaThere are many issues that can arise in a family around finances. Many people that find themselves embedded in financial problems simply don't take a visual approach to their debt. Financial success is a strategy. Not only is it a strategy but it requires flexibility, because life can change without notice. You have to be able to change with it and that calls for reassessments.  Occasionally a couple may find they can't seem to agree on the household finances because neither take a real look at the numbers involved with keeping a family functioning. Having a written visual aid puts much into perspective and a budget is a must. If you are in a financial crunch this can weigh heavily on your relationship. The only way to improve things is to tackle finances head on.



Here's a few tips:
A visual representation of your finances speaks volumes. Being able to see exactly where your money is going on a monthly basis is the best way to start gaining control.
Either on a notepad, or open up a document, begin with these steps:


1. List all of your monthly debt- include date due, amount due and balance.
2. List debt according to priority - mortgage, utilities, food, car payment, gas,cable, credit cards,hospital bills, dr. visits etc. Leave nothing off of this list.
3. Add up these monthly expenses
4. Add up your monthly income
5. Subtract expenses from income
6. If you have money left over- There are several options you can do to make the most of this:
A. Pay down credit cards with the overage either use it to pay off a credit card or make larger payment
B. Put into savings
C. Pay towards the principle balance on your home
D. Carry it forward to the next month and apply it to your income.
If you don't have money left over and are just breaking even- 
Consider a few things like debt consolidation, refinancing your home or car loan at a lower rate, or transferring credit card balances  to credit cards with lower rates. If that can't be done, you may have to have some yard sales, and put that money into your account for a little wiggle room. Take a long look at your finances and see where you can cut the fat. If there is unnecessary debts monthly, get rid of them.
If you are in the red- options -
Obviously you are living beyond your means  intentionally or due to life circumstances. Don't beat yourself up, everyone has been there at one point or other in their life. You may have to ask yourself some hard questions. Can I live without a house phone? (If you pay a cell phone you may consider this option), Can I live without my cable tv? (You may be able to cut back on some services, or switch to basic), Am I shopping for food and miscellaneous items wisely? (Are you buying brand name everything? This may be an area where you are throwing away some money), Do I waste energy? Check your credit and if it is still in a reasonable range consider refinancing, cash out options on your home also can be a big help in settling debt. Research all of your options.
Find money- Believe it or not many people avoid selling off their possessions to settle debts but this is actually a great way to get ahead of your situation. Yard sales, garage sales, ebay, craigslist etc. all are possible ways to get your hands on extra income. If you really want to hold on to what you have, that may mean parting with things you don't need.
*Create a budget document on your computer and update it every time you pay a bill by highlighting the paid bill in yellow and marking it paid. Check your bank balance daily to see what has been covered and mark it on your budget. This way you can keep a detailed list of what bills have been paid, and see exactly how much money you have in your account at all times. Remember to save this template to your hard drive and keep one printed copy in case your computer crashes. Back up your budge on a disk, or via usb.
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