Most families waste money and they don’t even know they’re doing it. The typical family spends more than necessary eating out, on utilities, on groceries and on a number of other items. Part of this is due to the “plastic” era we live in allowing us instant access to money we don’t even have yet. When you swipe a debit or credit card, you don’t “feel” the money leaving your account, which makes it easier to spend.
We can blame the credit card companies as they train the next generation with games, such as the Monopoly Electronic Banking Edition (includes credit cards) and Credit Card Barbie, or we can do something about it. Taking the time to look at your family budget, figure out where your money is really going and learning how to manage your money properly does more than just save a family money. It sets an example the children will follow, as they become young adults.
Three Common Areas Where Families Overspend
1. Entertainment/Eating Out
The entertainment section of your budget is necessary, but it shouldn’t surpass the amount you pay for rent or your mortgage. Eating at restaurants, taking the family to the movies and many other activities are very expensive. Putting a limit on this part of your budget will not only help you save a large amount of cash, but will also allow for creative ideas for better family activities.
Consider replacing paid activities with free ones, such as museum tours, trips to the beach or park and other inexpensive activities. Watching a movie at home can be more enjoyable than an expensive trip to the theater and cooking together can provide memories you cannot get from eating at a restaurant. Get the kids involved in the planning, so they can learn how to have fun on a budget, which will be an invaluable skill when they get older.
2. Utilities
Most families don’t know how much money they can really save on their utilities. Sometimes just comparing what other companies offer can show you how much you can save. Check out DIRECTV bundles to save you money when switching from your current TV provider.
You can also cut down on your electricity and water costs just by being aware of how much you use and making an effort to be more conservative! Consider energy efficient entryways and appliances that use less water to save long-term on your monthly bills.
3. Groceries
We all need to eat and we certainly need groceries, but many families can cut their grocery bill in half, if not more. Coupons can help, but smart shopping can also make a difference. Buying produce from a local farmers market, shopping at clearance stores and other creative techniques can help you cut your grocery bill by 50% or more. Another very productive way to cut your grocery bill is through proper meal planning. If you plan your meals ahead of time, you won’t be as tempted to buy extra things you don’t need.
Spend a little time looking at where your money really is spent and you might just find money you didn’t realize you had. Tracking all your spending for a 30-day period can help you see how much you’re spending in each category of your budget and it can help bring some awareness to the overall situation. Who knows, you might figure out that you can save for that dream vacation or put it towards debt relief after looking at your family’s spending.