Proactive Money Management Reinforces a Frugal Philosophy

With so many sources making demands, it can be difficult to reconcile personal finances. From credit card companies and landlords, to student lenders and insurance carriers, there is a long list of claims tugging at your monthly income. Whether you are living close to the edge, from paycheck to paycheck, or moving forward slower than expected, meeting household cash flow demands is a challenging proposition. Fortunately, practical approaches to money management make a difference, helping countless families stretch their financial resources. Long-term financial success relies on consistency and responsible use of resources. Unless money is no object, prioritizing spending and budgeting are two useful strategies, helping track money flowing through your home. Once you know where your money goes, it becomes easier to make adjustments and create sustainable conditions. Fueled by this pragmatic, frugal philosophy, there is no limit to the savings opportunities and cost-conscious tactics at your disposal - but it all starts with effective money management. If you need to 'find' more money in your budget each month, use the following methods to reinforce your approach to money management. In time, you'll feel the difference in your cash flow, giving you more power to shape your financial future.

Actively Manage Money Matters

It is too easy to become passive about your personal finances, especially with access to technology enabling you to automate so many of your financial transactions. While it may seem convenient to set your money matters on auto-pilot, you may be leaving money on the table by failing to take an active role.

Bank Accounts

- Make the most of personal banking by matching your accounts to your individual needs. Checking accounts, for example, sometimes offer interest for preferred depositors. Though it may be a marginal return, adding positive cash flow is typically a good idea. On the other hand, some checking accounts carry limitations on the number of deposits and withdrawals allowed each month, so an active user would be subject to fines and overage fees. Banks want your business, so they are happy to outline options and refer you to accounts best-suited to your needs. In some cases, sign-on bonuses and other incentives are offered to entice customers.

Credit Cards and Financing

- Households typically carry balances on credit cards and various types of loans. Properly managing your outstanding debt ensures you don't overpay on interest and finance charges. For the best results, periodically review loans and other debt balances, with an eye toward savings. Refinancing or moving to a more suitable financing alternative may yield gains, so a flexible approach (paired with a strong credit score) gives you access to the greatest number of financing options. High interest credit card debt quickly erodes personal financial health, so it pays to explore cost-effective alternatives. Consolidating debt to more affordable terms, for instance, provides relief for some consumers. If you're paying on a credit card balance each month, compare lending options; it may be possible to consolidate to lower monthly payments and a better APR.

Savings and Investments

- In addition to covering day to day demands, your income should provide for the future. And though it seems easier said than done, at times, establishing your nest egg is a budgeting priority. Use these tips to help move savings from the back burner:

Automatic Withdrawal

- Regular deductions, made from your paycheck, shave savings off the top, before the money mingles with household funds. Not only does it keep earmarked cash out of the flow, but an ongoing savings program keeps your balance moving forward - without a trip to the bank. Education Savings Accounts - Saving for college is a priority, especially for families with members approaching matriculation. Special education savings accounts are established specifically for building resources for school. In fact, tax benefits are available for college-savers, so check with your bank or financial advisor to ensure accounts are set-up correctly.

Periodic Review

- Like other aspects of your personal finances, savings and investments require ongoing attention and maintenance. With professional help, allocate your resources according to your age, risk tolerance, and financial goals. Over time, as your circumstances change, re-evaluate and make prudent adjustments. When it comes to managing money, a passive approach can be detrimental to your financial health. Instead of counting on fate to advance your fortune, take an active role managing money at home. For the best possible outcomes, pay close attention to bank accounts, various forms of financing, and personal investments. With control of these important aspects, your financial future is in your hands.