The first part of very year seems to hold financial lessons, which we quickly forget. Holiday spending, for example, rises beyond affordability, year after year, yet we continue to indulge the habit time and again. Not until bills come due in January and February do we feel the full effect of careless holiday spending, but by the time next year’s holidays loom, it is as if we are new to the game – eager to once again spend more than we can afford.
Although fourth-quarter cash flow provides a good example, the truth is financial challenges are not unique to a particular time of year. On the contrary, spending pressure is applied year-round, often resulting in cash flow shortfalls and other monetary obstacles. With so much at stake, and wide-ranging responsibilities for which to account, anything you can do to improve your finances is a step in the right direction.
If you are facing a first-quarter cash flow slowdown or simply need to firm-up your financial control, consider the following proven practices – used by effective money managers to regulate household finances.
Learn to Say “No” When You Can’t Afford to say “Yes”
Life consistently presents financial dilemmas, challenging our spending discipline and resolve. As much as you’d always like to be a part of the action and own the latest consumer goodies, financial good sense calls for discretion.
Learning to say no translates into reduced spending, which in turn helps fortify your household budget. If declining for savings sounds like an extreme strategy, think of the practice as “taking your time”, rather than limiting your access to goods and activities. In practice, some of your buying decisions will get a green light, but by waiting and evaluating the practicality of each purchase, you’ll avoid wasting money on ill-advised purchases.
Pay as You Go
Modern credit convenience sometimes leads shoppers down the wrong path. Have you ever reached for your credit card, knowing the money is not in your budget? Does your monthly credit tab include rising balances, you cannot seem to pay-down? Do you use plastic to pay for everything – even purchases of only a few dollars? If you answered yes to any of the questions above, your finances may benefit from a disciplined cash flow management strategy, shifting your spending limits to what you can actually afford.
Paying cash instead of leaning on credit alternatives is a novel approach in today’s fast-paced consumer markets. From internet venues to retail points-of-sale, buying opportunities are themselves designed for users equipped with credit cards. What if you stopped using credit altogether, turning to cash on hand for everyday purchases? For starters, debt balances would stop growing, giving you a chance to make headway. And your ongoing spending would remain tied to affordability, rather than other consumer drivers, which can lead you to trouble.
Putting the brakes on credit card use is a prudent step toward sustainable spending, but you can also improve upon other aspects of your financial life. Getting a handle on personal debt, for instance, reinforces your financial health and results in affordable living. For the best results managing debt, turn your attention to your most problematic accounts. Under certain circumstances, you may be able to improve your financial outlook, by realigning credit obligations.
Over the course of a lifetime, various types of financing are used to meet spending needs, ranging from big-ticket purchases to everyday expenditures. For an overview of available financing, visit sites like readies to compare and evaluate funding alternatives. In some cases, consolidating your existing debt balances or refinancing your outstanding debt obligations can result in lower payments and more cost-effective repayment.
The changing calendar is often responsible for highlighting spending inconsistencies. The months leading-up to the holiday season, for example, are typically characterized by increased spending – sometimes without the means to catch-up after the first of the New Year. If you are facing a shortfall or just want to tighten-up your financial flow, manage outstanding debt balances, pay cash as you go, and learn to say no when your financial security is on the line.