(This is a guest article by Jessie Hepzie*)

Most folks have a problem with handling money and family finances, and this is indeed one of the main causes of stress and trouble in families. As most of us find that the money we make is never enough to meet the spending, evidently it is due to poor financial planning.

Planning the way you spend has a lot to do with the attitude you have with respect to investments. Some people believe in making big things happen and this reflects in their "big" investments, and they end facing "big" debts that they are in no position to handle.

Others think they are saving a lot of money by putting it in a locker, but they end missing a lot of investments that they could have possibly made. There is no use of keeping money idle. Idle money never grows. As the value of money keeps on decreasing with time, and the cost of stuff like real estate keep skyrocketing, it is necessary to make at least some investment with minimum risks, if at all you want your money to grow.

Knowing your spending and planning it is very important if you want to reduce financial stress and plan for an economically secure future. You can also think about going for a financial consultant to help plan your finances, although you can do it yourself if you put in some work. If you delay taking control over your finances, it will ultimately go out of proportions and will be too late for you to handle at a later time.

You need to know the value of the investments you make and the stuff you spend on. You need to minimize on spending for things that depreciate in value. For example: Toys like electronic gadgets always get cheaper and cheaper, but certain possessions like land or property keep increasing in value with time. So, you should see that you avoid spending on things that have poor resale value and invest on those that keep increasing in value.

The best way to plan your finance is to prepare your family budget. You should include ways of saving money for the future in your budget. Sell off the useless stuff in your home, these include expensive gadgets and stuff that occupy your house but are of no big use. Most often we buy things because it is a status symbol. You need to avoid such spending, as having control over your funds is more important than showing off your status. There is no use of spending money to impress others. These people who you try to make an impression on will only get envious when you have pricey stuff, the same people will mock at you when you go bankrupt.

Another important part of improving your family finance is to clear any debts that you may have. The dangerous aspect of debts is that it keeps growing rapidly with time and unless you find some way of getting rid of it, it is sure to cause huge problems. When you have debts, and don’t do anything apart from paying the minimum interests every month; what happens is you don’t get money to save. Instead, you keep giving away the money for paying interest. You can avoid this with some quick action to get rid of the debt. This could be anything including selling a part of your property and using the money to get rid of the debt. Once you get over the debt, you will be able to plan your finances more clearly.

If you can’t afford to take drastic measures like selling off some property, you can find other ways like decreasing the spending on unnecessary investments and also saving some spending on the necessary stuff like food and shelter. You can use the money you save every month to reduce the debt and not just for paying interest. You can also go for loans that offer lower interest rates and use that to get rid of a debts having higher interest. And don’t postpone, the more you postpone, the more your debt grows to unmanageable proportions. Remember, a debt free family is a happy family.

*About the author: Jessie Hepzie maintains Oscommerce Template and Membership Logos.

*Image Credit: Photograph by lucias_clay [via Flickr Creative Commons]

11 comments:

  1. reward credit card said...

    We must always know what are our needs from our wants. Plan and have a check list before buying.

    - MJ Smith  

  2. Pay day loan said...

    If we keep a control on spending splurges and try to stick to a budget, we will surely be successful in saving a lot of money and improve family finances.  

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  4. simon cooper financial adviser said...

    Nice Suggestion and I also think having an open communications about the financial choices the family has to make and be careful about how you react to money issues. While you don’t need to reveal all financial details such as exact household income, it’s important to let kids know that the topic of money is not taboo and is open for discussion.  

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  6. Investment Banking Jobs  said...

    Nice tips to improve family finances..Knowing our spending and planning it is very important if we want to reduce financial stress and plan for an economically secure future.  

  7. Payday Loans said...

    These tips are really so good, people can easily improve their family finances. Investment is really very important. Planning the way you spend has a lot to do with the attitude you have with respect to investments.  

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