Owning a new home proves to be one of the most exciting stages of one’s personal life. Not only does it provide a new ambience to a person and his or her family, it can also bring about a new sizzle in their outlook in life.
The reality is that there are various factors which may contribute to people moving from one place to another. Aspects like being able to have more job opportunities in a different place, family preferences, and security can bring about thoughts of moving or even migrating. Ultimately, going out there and making that step towards a place you can call your own give off the most scintillating off all feelings.
However, along with the thrills of the new comes the reality behind it – how a mortgage reflects on one’s finances. Yes, owning a new home entails financial consequences and most often, it is not the lighter kind. Expenditures like new furniture and equipment, water and electricity bills and mortgage can be daunting when unorganized.
This is why it is important for those who just moved into their new home be reminded that finances should be tracked to avoid any unsurvivable debt.
Depriving one’s self of his or her needs for the sake of cutting some dollars off the bills may not be the best thing to do. Nor does buying all wants and needs only to find oneself running dry and unable to eat for the rest of the day.
With that said, the question now arises, how does one actually keep track of his or her finances after moving in? It is time to think a L.O.T and save a LOT! Here are ways to do just that:
L is for Learn the Value
In this time of earn-it-hard-spend-it-easy, the best way to go against the tide of mindless spending is to learn the value of the things one buys. This equates to spending wisely on the true necessities of life. Financially-stable people are best at knowing the value of their money.
One thing is for sure – being ‘money-smart’ is a requirement for people who want to be truly financially-stable especially after just being burdened by the finances of a new home. Then again, how does one become truly money-smart?
Every financially successful person has set his or her mind to buy only what is needed. Sure, a Poundex 2 Pieces Faux leather Sectional Right Chaise Sofa is as appealing as it could get. Maybe sitting on it does feel like being cuddled by a polar bear, or maybe not. However, at $600, it may not be the most necessary part of every home.
Practically speaking, a person who knows the value of his or her money would not spend $600 for furniture that can be substituted by a same comfy, cheaper $100-alternative that is made of essentially the same leather material.
This is not to say that luxuries at home are bad. The point is that for a person aiming to be financially independent, one has to inculcate a sense of awareness as to how one spends his or her money.
It is more enticing to buy furniture for a new home with a credit card on hand, but it is exactly what people should avoid. Credit cards are thought to provide a huge plus in one’s financial self-worth. This is actually a wrong notion because credit cards promote spending, and spending equals lesser money. Successful people always make it a point to eliminate any debt that may accrue interest. Accumulative interest in turn can cause huge headaches financially.
O is for Organize Future Expenses
Since there is no actual way of predicting how much one’s electric or water bill will be every month, it is still important that people gauge the amount they will have to pay for the services they utilized. Organizing funds for future expenses can make a person better prepared for next month’s payables.
There is a list of necessary expenses a new homeowner must take into consideration. For a home to survive the test of time, home maintenance services such as plumbing and electrical repairs may prove to be necessary to have a better home for the family. If unprepared, a person can expect a huge headache with regard to where to find the money needed to afford these important services.
The same is goes to water and electric expenses. Each person living in a new home should have an idea or gauge on how many kilowatts of electricity the household consumes on average, as well as how many cubic meters of water they use in order to prepare the funds required every month. In fact, there is a way to determine which appliance largely affects a home’s energy consumption.
Organizing funds for future payables at an earlier time can prove vital in many ways simply because it helps a person estimate the amount he or she still has left with to circulate on other needs or wants.
T is for Track Records
A simple way to keep oneself away from spending too much is by showing that a person actually spent too much. Looking at one’s bills is an important aspect in finances. Keeping track of them proves much more vital than it seems.
There is a plethora of ways one can track his or her records. Usually, paper bills, which are sent to home addresses, are recorded in a notebook every month. This is a good way to view the trend of payments, as well as to provide clues on the factors that made the accumulated amount so. However, with the shift of many companies to electronic and paperless billing, plus the combination of companies who still print on paper, many people are finding it hard to track their records.
With the help of technology, keeping track of finances can be done easier. MYOB Accounting Software is one of the most efficient software used to help record and take into account personal finances. Other people use spreadsheets using Microsoft Excel and other tools online to help them keep track of their finances.
Once information for at least a month has been collected, an individual can get a good baseline of information to use to create your personal budget. Creating the budget is a good first step, but the most important thing is to follow the budget.
People should make time weekly or monthly to track their spending, and start to see if they are actually keeping to the budget. Using a personal finance program or an online service is probably the easiest way to do this on an ongoing basis. Continuation in tracking where your cash is going is vital. People may be surprised to find out how the frequent small amounts they spend actually add up to big sum.
After tracking the status of a personal budget, one may notice some areas where adjustments become necessary. It is important that he or she does not just increase his or her budget without considering alternatives. While they may have limited choices, if prices or expenses go up, it is just proper to go for better deals before giving in to the extra expenses.