According to the latest complete figures from the U.S. Census Bureau, the average household income in the United States is $73,298. Of course, this figure could be artificially inflated as a result of the small minority of multi-millionaires living in the country and the fact is that many families are living on much less than this.
So, how do you balance a relatively modest household budget each money without reaching for the credit card and plunging yourself further into debt? The key is self-discipline.
Disciplining yourself when it comes to money can be tough, particularly when you are coping with a relatively small income. But when every purchase seems essential and there is never anything left at the end of the month, taking a tighter grip on your purse strings is the only way to regain control of your spending
Understand Where Your Money Goes
One of the most important aspects of self-discipline is taking control of your finances and understanding exactly where you are spending your money. Many people in America simply do not know how to budget. In other countries, such as in Finland, financial literacy (and the basics of household planning) are treated as a lifeskill and taught at an early age; however, in the U.S. this is a skill that many people fail to learn.
Create a budget by looking at your monthly bank statements and include everything you spend on a monthly basis (from the big household bills to your daily cup of coffee). By knowing where your money is going, you can take a realistic look at the big picture and determine the best places to make cut backs.
Self-discipline will certainly be required to cut down on some of your favorite daily indulgences (coffee and lunch out are two of the biggest culprits here), but you will be amazed by just how much you can save if you do.
Think Before You Spend
Children are like tiny bottomless money pits and, as loving parents, our desire to spend money on them can seem limitless. Birthday parties, Christmas presents, ice cream after school, a new costume for Halloween, the list is endless. However when you are on a tight budget, self-discipline dictates that you should think before you spend. And think in terms of long term goals, rather than fleeting short term satisfaction. After all, what would bring more long-term happiness to both you and your child: that new toy today or an extra $20 in their college account to make an investment in their future?
Developing self-discipline is not easy, but it is essential if you are looking for long-term financial security. That doe not mean that you cannot have occasional treats or rewards (and it certainly does not mean you cannot grab ice cream with your kids or take them on a fun day out every now and again), however these should be carefully planned out and something you only enjoy if the budget allows, rather than a reason to break out the credit card.