During vacations, many tend to lose control over money. Reduce money’s decline by planning your finances.
Many persons go by life dreaming on having money for starting out, but they don’t really take control over their expenses. Don’t be one of them; as a good entrepreneur you should plan and be prepared.
In this day and age there are many factors that play against our financial order. On one hand, we become victims of the environment’s pressure and publicitary means which increase the urge to shop.
On the other, many suffer from an illusion of abundance, caused by a greater liquidity and sales increase during vacations. The problem is that most assume that they can spend more, and distort the proportion of what they really can deal with.
It’s crucial that you don’t lose control so that this mess won’t affect your personal finances in the next months. This is why we give you some tips to plan and avoid sad consequences. Take note:
Save your bonus, extra, stipend….
When you receive any extra money, put apart an amount, ideally 50%, and deposit this in a savings account where you will have no access to until after January. When possible, decide to invest.
Make a budget for times of shortage or expenses
Make a budget based not on what you would like to spend, but how much you really can spend, including gifts, food, leisure, etc. Identify in which elements you could save, which are essential and which could be ruled out.
Send your credit card on vacation
A good strategy to follow is to spend pure cash. Lock your credit cards out of sight, or deposit a limited amount in your debit card. Aside from being an excellent way for not spending more than necessary, it’s guaranteed that you will not incur in debt and deal afterwards with harsh expenses.
Start your Christmas shopping as early as possible. Yes, we might be in July, but remenber that last minute shopping only brings desperation and wasteful spending. Besides, if you shop ahead of time, you could find sales or promotions, which are less and less as the holidays arrive. This also applies for Birthdays or vacations. Basic rule:
Get a head start on high season.
Revise interests and commissions
If you need to use credit cards, or have to ask for a certain credit to face shortage times, you must examine thoroughly the associated interests and costs. Don’t forget this. Avoid having an unpleasant surprise as your financial statements arrive.
Ideally one would plan expenses, considering personal income as well as outgoings, in order not to have last minute surprises. The moment when you define which will be your expenses, add a small buffer for emergencies, which could work as savings, should you not use it.