Managing Household Finances: Only spend what you have!

14 Apr

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The trend in most homes these days is to buy what you want, when you want it.  Even if it means to go in debt.  Again, I am not a financial expert, but have not found one yet that suggests that you go into debt or borrow money.  You have to LEARN to spend ONLY what you have.  (Not what you’ are going to have next month.) 

Learning this skill is quite a task!  I know from personal experience.  And no we are not out of debt YET!  But we do have a plan to get that way and are no longer spending what we don’t have.  Here are some basic principles we try to follow to be sure we don’t fall into the “borrowing trap”:

1.  NEVER borrow money.  This includes Visa, Discover, Master card, Mom. Dad, Grandma, Grandpa, etc.  Believe it or not, even though they don’t charge interest, THEY WANT TO BE PAID BACK, TOO!!!  And sometimes there is “hidden interest” that comes in the form of losing someone you love over money.  Don’t risk it. Even if they offer, do not accept borrowed money!  If you don’t have it, don’t spend it! 

2.  Be reliable.  If you have already borrowed, or have no choice but to borrow, pay it back at LEAST as you agreed to or as soon as you possibly can depending on the type of debt!!!    So if you owe a bank, you bought the car – pay them on time each month!  If it is a friend or family member that you borrowed from, this means if you have to sit at home for months and not go to the movies, out to eat, or the ball game, then you should.  Be creative instead:  Have friends over to play cards if you’re bored.  Go to the park and take a walk if you need to get out.  But do not spend money on extras if you owe someone you care about money.  Paying on time is called having integrity, responsibility, and honesty. 

3.  Determine wants/needs.  Did you know that a telephone and Internet services are not necessities?  There was once a time when no one had either of these things.  If there is an emergency, you can be found by other means.  I am not suggesting you cut off your phone and Internet until you are debt free, but do you really need unlimited long distance?  How about reducing it to the basic plan.  Many of us forget the difference in wants and needs.  Before you buy anything, ask yourself if it something you really have to have.

4.  Learn to tell yourself no!  Living minimally doesn’t mean you have to live in the dark.  In fact, since we started living minimally, we have more (by couponing)!  But it does mean that we may buy a $30 pair of shoes instead of the $130 pair of shoes.  It means that we wait to buy that gun or laptop right now, because we don’t really need it (that happened to us this weekend!).  It simply means that we want to do without now, so that later in life, we won’t have to.  It’s actually a fun challenge!  Not a burden!

5.  If you run out of money, stop spending.  Instead of borrowing money for groceries, how about calling your grandmother and asking her to cook your favorite meal!  Or, dig way back into the pantry and make the tomato soup that you bought that wasn’t your favorite brand. 

* In my opinion, and that of several financial advisors, “good debt” may be a mortgage or student loans.  Paying rent is a waste of money,so as long as you aren’t financing a mansion, I consider a mortgage good debt.  Same goes with student loans.  As long as you aren’t taking out extra and blowing it, flunking out of college, and as long as you FINISH with a degree, this debt is considered “good” to me because it will increase your income in the long run!  My husband, however, somewhat disagrees with me on this and has a valid point.  He makes a great living WITHOUT college and student loan debt.

4 Responses to “Managing Household Finances: Only spend what you have!”

  1. Angela April 16, 2010 at 12:52 pm #

    I think I will copy this and email it to some people I know!

  2. Isha April 18, 2010 at 2:36 am #

    I reviewed our phone bill a while back and found that we were wasting so much that we could cut everything out, afford basic dsl, and still have a lower bill!

  3. Tina @ Savings Corner August 22, 2010 at 1:50 am #

    Kelly, GREAT article and advice! 🙂

Trackbacks/Pingbacks

  1. Managing Household Finances: Keeping Track of your pennies! « Adventures in Momville - April 28, 2010

    […] Only Spend What You Have […]

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