The U.S. economy remains in a state of uncertainty despite reports of improving consumer confidence in 2013. While unemployment is gradually going down, most of the jobs being added do not pay well. Consequently, lower and middle class individuals continue to struggle. In order for these people to improve their financial situations, they need to start watching their budgets more closely. The following are tips for improving personal finances.
1. Keeping records of every bank deposit and purchase must be done on a ledger or with basic accounting software. Knowing one’s current bank account balance at all times is extremely important.
2. Planning a budget for each month will help eliminate extra unnecessary purchases, such as impulsive shopping at malls. Staying away from expensive stores is essential.
3. Consumers need to avoid using credit cards if they are already in financial trouble or have low salaries. Many credit cards have high interest rates and hidden costs such as late fees that can add up over time.
4. Gas prices have played a big part in driving up many costs due to shipping expenses. People with financial problems should avoid joy riding and limit driving to essential trips.
5. Food prices are also very high, so consumers should avoid frequently eating out at restaurants, which are more expensive than preparing food at home.
6. Tight budgets do not allow much room for excessive entertainment. While some fun is acceptable, replacing expensive activities like vacations with cost-free pastimes is much more effective.
7. Financially challenged individuals need to restrain themselves from activities that can drain money quickly, such as gambling.
8. Using debit cards is okay as long as the person remembers to keep track of his or her bank balance.
9. Borrowing money from family and friends without a means of repaying them can lead to souring relationships. Individuals need to live within their means and avoid borrowing outside of institutions.
10. Individuals who have limited income or are out of work and cannot afford to pay bills should seek financial help from professionals who can provide opportunities for responsible lending.