As the Holiday season approaches, many families are left wondering where all of their money went. Whether it is end of the year expenses, Christmas presents, or other random expenses, it’s not uncommon for families to be left wondering where all of their cash went. I know what this is like. Years ago my wife and I struggled. We weren’t to the extreme of relying on food stamps and other government assistance, but suffice it to say that we did not even think about getting each other presents for the Holidays.
Yet, even though I can relate to financial challenges around this time, we have made improvements to our finances in ways that we wouldn’t have imagined just a couple years ago. If you are wondering how to increase your savings around this time of the year, here are some practical steps to help you along the way.
1 – Analyze Your Spending
The first thing you can do to increase your financial situation is to determine where you are spending your money. Most families get carried away on their spending because they are not keeping track of where the money is going. One of my friends always felt like she didn’t make enough money. When I asked her where she was spending money, she looked at me with a dumb look on her face. She’s not a bad person, nor is she irresponsible. It was just that she wasn’t paying attention to where she was throwing her money away. As it turns out, she was eating out too often and also buying lots of gadgets. While it’s never easy to change your spending habits, it’s impossible to do if you don’t know what your are spending money on. I’m convinced that those who use a payday loan every once in a while do so because they don’t stop to analyze their spending.
2 – Reduce Your Spending
Once you know where your money is going, start by selecting areas that can be eliminated or reduced. It is often difficult to change these spending habits, but you may be able to find easy ways to save a lot of money. For example, if you are going to the movies every weekend, maybe it’s time to reconsider that habit. By simply watching movies at home, you can still enjoy the same hobby (even making popcorn at home), while also saving nearly $100 a month (for two people). That sounds like an easy fix to me.
While improving your financial situation is clearly more complicated than a two-step process, it often starts with these two areas. After you have minimized your spending, if you are still struggling, it may be time to look into bigger changes: this could mean a job change where you can earn more money, or it could mean moving to a cheaper location. This may sound extreme, but it could mean the difference between happiness and stress.