Stretching your dollar
With all the talk circulating about controversial aspects of this year’s Budgetary Proposals, earlier announced by Minister of Finance and Economic Affairs, Christopher Sinckler, namely the dreaded increase in the National Social Responsibility Levy (NSRL), it stands to reason that consumers should be looking to tighten their fiscal belts and stretch that almighty dollar.
In these tough economic times, we cannot afford to let a dollar slip by, though some may argue that we still need to “live a little”. We all need to stretch whatever income we work hard to earn, so that it can do more. So here are a few tips to ensure that householders can maximise and stretch their hard-earned cash, according to the Mass Mutual Financial Group.
Ways to stretch your money
1. Create a spending plan. Many people resist the idea of a budget, and associate it with hardship. Instead, look at it in a positive way. Create a monthly “spending plan” for your fixed and discretionary expenses. When you plan your spending, you may find you spend more wisely, because you are taking control.
2. Pay yourself first. Put savings at the top of your spending plan. If you wait until the end of the month to save any leftover cash, you may find yourself without a nest egg when you need it most. A good general rule of thumb is to save at least ten per cent of your income before spending the rest.
3. Track your spending. Record your expenditures for a month, especially for small optional items. You may be surprised to discover how easily purchases costing only a few dollars can add up. At the end of the month, review your expenditures and adjust your spending plan accordingly. Once you see where your money is going, you may want to make different choices about your spending.
4. Shop for value. Look for opportunities to get more value from each dollar spent. Shop and buy in bulk. Purchase clothing, furniture, and household goods when they are on sale.
5. Eat in. Restaurant dining can be expensive, since you are paying for service, as well as food. Liquor and desserts (which you otherwise might not eat at home) can boost the tab even higher.
6. Reduce housing costs. Housing is a major fixed expense. Consider reducing this cost by buying or renting a smaller place, or one with fewer amenities. If you rent, and plan on staying in an area for more than a few years, consider buying. Remember, a house is an investment that generally appreciates over time.
7. Trim transportation costs. Transportation is another large expense for most families. Many households now own more than one vehicle. The more cars you own, the higher the costs for insurance, repairs, fuel, and parking. Carpool, if possible. The savings in vehicle-related expenses may offset any slight inconvenience.
8. Set aside a cash reserve. Having a cash reserve can help you stick to your spending plan and help keep you out of debt when emergencies, such as a major car repair or short-term disability, arise.
Cutting back on excess spending does not have to be difficult, nor does it mean that you must continually deny yourself many of life’s simple pleasures. A personalized spending plan can provide that “extra” income and stretch your hard-earned cash in these tough times.