Setting realistic financial goals

Money is of great value to the vast majority of people. We all need money for different reasons. Money is required to fulfill our needs like eating, dressing & shelter etc. Also, money is needed to have some fun in life which is again an important aspect. When money is not easily available to us, it becomes quite lucrative to fall for the option of securing loan, hence getting into debt. And once you are trapped into a debt cycle, it becomes really difficult to escape. Few people who are in financial trouble understand fully that there are some ways through which you can come out of the horrible debt situation. However, it requires a good personal discipline and the understanding of personal finance management principles and rules. Without applying those rules and regulations in your daily life, it will become a lot difficult for you to get out of debt situation.


The initial step to get out of the trouble is to face the reality and realize how big the trouble is for you. There is a strong need to develop a spreadsheet which must contain your net income and all expenditures. It is important to include all the details because in the end it will be helpful for you to evaluate why can’t you make ends meet and where you could possible cut from in order to be able to recover.


One of the main rules to have a healthy family budget is to always spend less money than you can make. You should set up a savings account and direct 5%-10% of your earning into it prior to paying any of your bills. Even if you save 2% of your monthly income could be of some value if you make it a consistent habit. The key thing to remember is to set this money aside before spending your money on everything else. Otherwise your best laid plans won’t work especially if you are already facing a lot of trouble due to your financial constraints and debts.


Entertainment and luxury spending up to some limit is of no harm but it shouldn’t throw you into even bigger debt. You should make a budget for some inexpensive entertainment every month but consider the option of cooking with friends and having fun rather than going to an expensive restaurant for instance. Similarly you can avoid watching a movie as soon as it gets released. Do watch it in some promotional campaign so that you can save some of your money.


When you are making your family budget, don’t overlook expenses that occur only once a year or a few times a year. Insurance, car maintenance or medical expenses may fall into this category. It is advisable to not to overlook them as they are quite important and they will ruin your budget if you don’t expect and plan for them. If you pre-plan these expenses, you’d be able to save a lot of money and it will greatly help you in making a sustainable income plan.


If you are not earning much and not up to a mark where you can cover all of your expenses, then you should consider what could be cut from your expenditures without making you suffer too much. You may be able to walk or take a bus rather than driving your own car. For instance, you could just ride a bicycle. When shopping for groceries, you could watch and take advantage of special discounts, promotions and coupons. When you are at home, try to save from the utility bill by switching off all the unnecessary lights and electronic items. In this way you would be able to better manage your finances as well as the environment.
Once you get careful with your money and mold your spending habits, you will see that getting rid of the debt problem is not a difficult situation.