Would you agree that the most common work-related complaint is salary? Many people feel that they should get paid more than what they currently make. Likewise when raises do come our way, the extra $50 - 75 a month seldom makes an impact on a monthly household budget. It seems that every increase is sucked into the spending abyss. To that end, I have never met a person who got a raise on their current job and claimed to become financially secure because of it. One must be financially conscious when dealing with household income and expenses. I've seen people get a $5000 raise in one year and still have less money to spend. Let's look at the math. If you get a 2% salary raise and go out and buy a new car, then you will probably have less money available to spend. In other words, your amount of money available to spend per month decreased since with your raise came your purchase of a new car. A 2% raise for a person making 50K is $1000 per year or less than $80 per month after taxes - good luck trying to find a dependable car with a payment that low. What can you do? Here are some tips for maintaining a healthy pace toward financial security with or without a raise:
1) When money enters your household by a raise, bonus, or income tax refund, you have to plan to save it. Even if money is tight, you are surviving on what you have right now. If extra money comes in, that money should go into savings. If you are surviving without it , then you can put it away so you don't spend it. Have a short-term savings goal of a $1000 emergency fund and a long-term goal of at least four times your monthly expenses.
2) Plan your shopping. Look for on-sale items/coupons and always shop with a list. There are some great coupon sites to help you find a good deal and save. Planning reduces the impulse buying and unnecessary spending.
3) Make a budget and stick to it. You have to make a monthly budget. I keep my monthly budget on a spreadsheet so I can create sheets for each month and hold reminders of the yearly bills. Spreadsheets can be set to calculate totals, and they make editing easy.
4) Tap into trendy ways to make money. Yard sales are hard work (5-6 hours prep and 1-2 days displaying products). If you do try a yard sale, be sure to advertise it online. Let's face it - most of the purchases of used items occur on the Internet, and your items are on display 24/7.
These are just some ideas of how to budget and save. Please share your tips on what works for you.
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