It's easy to want the best for yourself and your family in every area of life. It's just as easy to go into debt - as you probably know - and these days, more than ever, people are looking for easy ways to cut their spending and be able to save a little more for their retirement or for their children's future. Some of the smaller ways to reduce spending might be simple: conserve electricity, eat out less, change your cable or cell phone plan - but it might surprise you to think about how virtually everything in our lives might be a result of financial excess - starting with these five major areas.
Everybody wants that den, swimming pool, or big backyard, but mortgage troubles are at an all-time high. A large home gives us a sense of accomplishment, and most of us have more space than we actually need. These days, you probably know someone who has dealt with foreclosure - and more often than not, when housing costs turn too high, families end up in apartments or smaller homes, maybe not even in the ideal neighborhoods they wanted. If we were looking for homes we could afford in the first place, it would be so much easier. Even the region where we live is something to consider - you might have always wanted to live by the beach, but can you afford to go bankrupt doing it?
Fancy cars are a status symbol, and cars with a lot of modern amenities can be fun and convenient. But can you really afford something that's brand new and fully loaded when all you need is to get from point A to point B? There are plenty of used cars that will be reliable for years and years where you'd have little to no payment eating up your income every month. The price of gas and insurance will be draining your pockets enough already.
Nearly everybody is guilty of spending too much on a pair of shoes, or a jacket, or any single item of clothing. Not only do we tend to own more clothes than we actually wear on a regular basis, we also pay for fashion labels and shop at elite stores, fooling ourselves into thinking we're getting better quality product. The reality is that something you buy at a thrift store can be just a good and last just as long.
In most cases, it's still far better to go to college than not to go. But that expensive private school across the country that your child has their heart set on may be a huge waste of money compared to a state school close to home. Community colleges can be virtually free, depending on your income and where you live, so if money is tight, it's a good idea to start taking general classes there before you transfer to a larger institution.
5. Credit Cards
While having a couple credit cards to use in an emergency is always a good thing, most of the time people have too many and spend too much. The enormous interest rates end up costing you a lot of extra money in the long run.
It's perfectly fine to live beyond your means every once in a while, but if you want to get serious about your financial issues, you may have to look at the big picture. Remember, it is always better to be able to improve your quality in life later on because of money you've saved than to find your quality of life decreases because you can no longer pay for it. A little frugality, it really never hurt anyone.