If you and your family have a spending plan that has helped you to keep your bills paid and stash away money for your savings on a regular basis, then your ahead of the game. But, that method might not work so well once you return stateside. You will discover that you’re paying significantly more for essential expenses such as housing, healthcare and other goods and services than you did while living overseas.
Because many of those expenses begin to add up and start to place stress on your daily life, there is no better time to begin to proactively look for better ways to keep an eye on your money. Here are four tips to managing your money.
Tip#1: Make Sure you have good records
The first step to managing your money is to track your monthly expenses. By using a check, debit or credit card, monitoring what you are spending is easy. All you have to do is track what your expenses are by reviewing your monthly statements.
However, it is much harder to track monthly expenses while using cash. One way to do it, is by keeping track of all the cash that you have taken out of the ATM. Another way is to keep a daily record of what you spend and the items you spend you spend money on for a couple weeks, either electronically or by hand with a note pad. You will be shocked at what you might find out. In many ways, a Starbucks’ coffee a day can add up.
Once you have the data to work with, you can divide the expenses by category. Building a budget online or by using the tools found in SDFCU’s Finance Works, a free budgeting tool in Online Banking. The last step is the deciding where you can cut back on spending and how much. Making this decision can be a hard one. However, you will discover that it is easier than you think.
Tip#2: Monitor your cash in and cash out
Monitoring your cash flow is very important. You need to know:
How much money you have coming in,
How much money you are spending each month, and
How much, if any is left at the end of each pay period.
If you discover that you have considerable amounts of money remaining after all your bills are paid, then you have positive cash flow. If you find that you are regularly running out of money before paying all of your bills, then you have a negative cash flow and need to take action quickly to avoid serious financial hardship.
Tip#3: Strategically make the tax system work for you
Once you return stateside, preparing your income tax return might be a little complicated. If you were posted at a mission or as a counselor overseas during the year before returning home, you probably will have tax-exempt as well as taxable income that must be reported differently. You also might qualify for the earned income tax credit, education tax credits, childcare credits and more. To find out more information about your particular tax situation, please consult with a tax adviser. You might be surprised how much money you will save on your taxes.
Tip#4: Link your savings to checking
Possessing a checking and savings account are essential tools in successful money management and helping you reach your goals. By linking your savings to your checking account, you can authorize automatic transfers of a percentage of your paycheck to savings account to help build your savings balance. In addition, direct deposit of your paycheck or other benefits and electronic bill pay can say you considerable time and money.
Donovan B. Fox www.SDFCU.org