6 On Your Side Answers: Tips on wise saving and spending

KNOXVILLE (WATE) – At the beginning of a new year, it’s a good idea to take a look at your family’s financial budget, especially if you are struggling.

Diana in Maryville asked for some tips for wise saving and spending as the new year begins.

Money management is a process. and if you put money aside, remember slow and steady wins the race. Once you have determined how much you can save monthly, make your deposits consistent by using automatic payroll deductions.

As you look at your monthly budget, examine how much you spend on entertainment. If the total is more than 10 percent of your total household budget, it’s time to scale back. Five percent is ideal.

You’ve heard this before: money doesn’t grow on trees. Don’t let your debit card fuel the feeling that money is free. Start a strict “cash only diet” on some expenses, which helps put your spending habits in perspective. Allot yourself a specific amount of cash for purchases during the week.

SLIDESHOW: Tips on wise saving and spending

If you carry a big credit card balance, thousands of dollars, and make only the minimum monthly payments, that will eventually cost you thousands of dollars in interest fees if it’s stretched over several years. Send as much as you can to your card company every month. It will save you in the long run.

If at all possible, set aside money for a rainy day. Having an emergency savings will keep you away from financial ruin if you lose your job or have a long illness. have between three to six months worth of living expenses set aside in the emergency piggy bank.

In our society of instant gratification, the cardinal rule of household budgeting is live within your means. Don’t spend more than you earn. For example, don’t charge an expensive vacation to your credit card. Wait until you’ve got the money in the bank.

For the best results in saying goodbye to the financial treadmill, learn to moderate and resist reckless spending.

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