There’s a fine line that families walk in the 21st century that simply didn’t exist for the previous generation. Our parents seemed to have it so much easier, didn’t they? They were able to keep the roof over our heads, ensure food was on the table and still have enough left over to squirrel away in savings. They could both work, but they didn’t both have to work and while there were certainly lean times every now and then, they were still able to save for their retirement.
They made it look easy, but they didn’t have to contend with the financial realities of today. Financial advisers will tell you that you should spend no more than 30% of your income on housing, but in a time when house building is at its lowest since the 1920s and the cost of property increasingly skyrockets, that’s far easier said than done. And that’s before we get to the rising cost of utilities, food, clothing and healthcare. Plus, given that most families have two working parents working longer hours than ever before, the hectic lives of modern parents are not particularly conducive to keeping a close eye on the family finances.
When faced with escalating costs everywhere they look, the temptation for many parents is to throw money at any given problem and worry about the consequences later. This can result in wasteful panic spending. In light of this, it’s important to be aware of the most common forms of household spending and how you can avoid them.
First of all… Always Be Budgeting
Before we get into specific examples, it’s worth remembering that the single best thing you can do to keep your household finances under control is to establish a realistic monthly budget and stick to it. We live in tempting times with so many desirable consumer products on the market and so much (potentially damaging) credit available, it can be tempting to just eyeball our finances and assume that we can afford the things we really want. This tends to lead to wide eyed reactions to monthly bank statements. Keep a close eye on what’s going in and what’s coming out and you’ll be spared any unpleasant surprises.
With that in mind, let’s look at the common areas of household spending where your family could be throwing money away…
Credit cards can either make or break your household finances and it all depends on your ability to be smart and make an active effort to keep your credit card debt down. It’s important to remember that credit card companies want your business, and you can use this to your advantage and play them before they play you. Many banks or credit card companies will use attractive introductory rates to lure you in or a period of 0% interest (in most cases up to 2 years). Sounds great right? Well, it can be if you move the debt to a new card before the 2 year period is up and the interest rate skyrockets. Move the debt fast or a greater and greater proportion of your debt will be taken up by interest, making it harder to pay off and draining your family’s finances.
There are only two things that are certain in life, death and taxes. Fortunately, over-spending on tax needn’t be a certainty. As meticulously as we may work through our tax returns every year, few of us understand the intricacies of the tax system well enough to know that we’re spending exactly the right amount. This is where a good tax attorney comes in. A good tax attorney can save you far more than they cost and fight your corner if you’re audited by the IRS. Joe Callahan Sheppard is a highly qualified irs tax attorney so you should check out his site to see how he, and others like him can help you. Let’s face it, if there’s one area where you don’t want to over-spend, it’s in your taxes!
Most of us have little to no idea how much energy our homes are wasting yet act with surprise when we receive ludicrous energy bills. The thing is, there’s no singular grand gesture to keep energy waste down, it’s a matter of making numerous small choices from keeping your showers under 4 minutes long to turning a light off after you leave the room. Other useful energy saving measures include:
- Replacing your light bulbs with more efficient LED or CFL bulbs.
- Unplugging ‘energy vampires’ like TVs, DVD players and stereos that are usually left on standby overnight.
- Installing a smart shower head to mitigate water waste.
- Using blankets and comforters to keep warm or hand held fans to keep cool rather than reaching for the AC.
By keeping an eye on these three common areas of overspending you can secure your family’s finances and open your bank statements with a smile.