How to Create and Manage a Budget

Budgeting has a bad reputation among a lot of America households who view it as a way to strip all the fun out of spending money. No more shopping. No more eating out at restaurants. No more golfing on weekends.

That is not the purpose of a purpose of a budget.

A budget simply shows how much money you have coming in and how those funds are spent. It’s one of the most important tools in building a successful financial future, because it helps you get the most out of your money.

Regardless of economic standing or which generation you fall into, every consumer can benefit from creating and managing a budget. A budget gives people a sense of control over their money. Think of a budget as a financial foundation. Each person’s foundation is going to be different, just as each financial situation is different.

Choosing a Budgeting System

There are four basic ways to create, track and monitor a budget. Each system uses different techniques, but they all center on organization and attention to detail.

• The Notebook and Pen: This is the oldest method for budgeting, and it’s also the least expensive option. With this method, you simply write down all your sources of income and all your expenses. If they balance, you’re good to go.
• The Spreadsheet: The most popular spreadsheet software for budgeting is Microsoft Excel. Many websites offer free samples of Excel budgeting worksheets that consumers can use, instead of trying to create their own. A spreadsheet lets you organize a lot of information easily and does the math for you.
• Free Online Software: There are several free web-based software programs that can help with budgeting. Such programs like Manilla and Mint.com allow you to create and group your expenses into categories and track your spending, so you can see exactly where your money is going as soon as the transaction takes place.
• Financial Software: There are also financial software programs, but you need to be computer-savvy to use them. Quicken is a leading product.

You can also check with your local credit union or bank for tips and tricks. Your saving institution may even have budgeting worksheets on hand to get you started. If you prefer, the U.S. Financial Literacy and Education Commission (FLEC) has numerous budgeting worksheets and resources to help you at any stage of life.

Creating a Budget

Budgeting strategies and techniques vary across the board. There will be differences, for example, between what works for a first-year college student and one for a retiree. But there are five basic steps in creating a budget. They are all important because they build on one another, helping you organize your finances sensibly.

Step 1: Set Goals

There are two types of financial goals: immediate and long range. Immediate goals focus on using your money today, while long-range goals deal with saving and spending over decades. Both are important, and complement one another: Saving money today affects what you spend now but also how much you’ll have later in life.
You need to determine which goals address necessities and which ones cover luxuries. Then, you can prioritize your financial goals accordingly.
Immediate financial goals include covering current expenses. Some of these are obligatory and include your mortgage or rent payment, car loans, utilities bills, child care, food, cell phone and household supplies. Secondary goals, called discretionary items, include non-essential clothing, subscriptions, dining out and taking vacations. Long-range financial goals could also include retirement savings, investments and charitable donations. If you have debt, paying it down can be both obligatory and discretionary. Making required payments is essential to financial solvency, but paying debt early, while not required, can make long-term sense.

Step 2: Calculate Your Income and Expenses

After you determine your financial goals, you need a plan for reaching them. To do this, you need to evaluate your income and your expenses. Most people budget monthly because most bills follow a monthly schedule.
Start by making a list of your monthly income sources, including your salary (after taxes), any bonuses you incur on a regular basis, and child support or alimony payments. If you don’t know the exact amount, you can use an estimate. Once you have your numbers, add them up. The total is your monthly income.
The next part of the equation is your expenses, which fall into three categories: fixed committed expenses, variable committed expenses and discretionary expenses.

• Fixed committed expenses: These have a fixed monthly amount, such as your mortgage or rent.
• Variable committed expense: These vary from one month to the next month based on need, and would include groceries and gasoline.
• Discretionary expenses: As noted, these are optional expenses and include recreation and entertainment. A gym membership would also fall into this category. Discretionary expenses often make life more fulfilling, but they should be the first expenses to go if you can’t afford the basics.

If you fail to pay off your credit card bills each month, you’ll begin to pay a great deal of interest. This can play havoc with any budget. If your carried-over credit card payments eat up more than 10% of your monthly income, you should consider speaking with a nonprofit credit counselor. Over the telephone or online, a free credit counseling session will walk you through your budget and recommend expenses that can be reduced or eliminated. If you qualify for a debt management program, you may be able to reduce your monthly debt payments as well.

Step 3: Analyze Your Spending and Balance Your Checkbook

The goal in budgeting is to make sure your expenses do not exceed your income. If they do, and more money is going out than is coming in, then you need to make adjustments. This doesn’t necessarily mean you need to start penny-pinching; it just means it is time to revisit the discretionary cost category and see where you are willing and able to cut the fat.
If you make any payments by check, your checkbook register can help you keep track of incoming and outgoing money, and what you spend money on. Although paying by check is becoming rarer, those who stick to this payment method should keep their checkbooks balanced. This will help you avoid overdraft fees or bounced checks, and it can shed some light on your spending habits.

Here are the basics:

• Keep records for all your deposits and purchases. Record each one in your check register, which the bank will provide you.
• Print out or download your monthly bank statement if you aren’t already getting one in the mail. If you’re doing everything online, there is software that can make this step — and budgeting — easy.
• Do your own math for deposits and withdrawals to make sure your bank hasn’t missed anything or taken liberties with your money. Reconcile line by line, making sure your record of checks is the same as the statement.
• Find the ending number from each monthly statement and work backward, check to see what has cleared, and what has not cleared. Deposits that haven’t cleared will need to be subtracted from your balance. If your checks haven’t cleared, they will have to be added back to your balance until they do.
• Go line by line and account for any fees you’re charged. Seeing them up close may prompt you to call and ask to have some removed, which the banks often will do if you persist. Also, add the pennies of interest you may have received.
• Again, if you have access to a computer, or even a smartphone, this process can be automated using financial software or apps, saving you time and frustration. The goal is to review your cash flow, look for errors and learn from what you see.
  

Step 4: Revisit Your Original Budget

After you’ve had a chance to monitor your income and expenses for a month or two, you will be more aware of areas that need adjusting. Maybe your initial monthly income estimates were off, or perhaps you didn’t account for expenses like car repairs or veterinary bills. Make adjustments, but always balance inflows with outflows.
Once you work out all the kinks in your budget, you need to commit to following it. No budget is forever, however, so periodic reviews are key to success.
If you get a promotion, for example, you can increase your discretionary spending as well as your savings goals. On the other hand, a layoff or fewer work hours could mean cutting back on spending until you restore your income.
Savings should be part of the plan. Financial planners recommend that your savings cover six months of income, enough to compensate for a job loss or other emergency. You might find it useful to open a separate savings account and fund it gradually until you reach the goal. Keeping a separate account will make it more difficult to raid the emergency fund to cover non-essentials.

Step 5: Commitment

Creating a budget is a great step in working toward a more financially sound future for you and your family. Committing to your budget will get you there. Remain realistic, evaluate it often and don’t be afraid to adjust. Budgeting is all about balance.

Managing Your Budget When Unexpected Bills Arrive

As mentioned, an emergency fund is crucial to financial security. Start by setting aside $50 per week. In a year, you would have $2,600, plus any interest, for when the refrigerator stops working or when the transmission blows.

Experts recommend looking at your withholding taxes to find hidden cash. If you receive a large refund every year, perhaps you need to change your filing status to receive additional money in your paycheck to put toward an emergency fund. Unless, that is, you are putting your tax return funds into that fund.

Medical crises in particular can turn a balanced budget upside down. Negotiate large medical expenses, such as an emergency hospital stay, with the hospital. Almost all hospitals negotiate fees. Often if you contact them immediately instead of waiting until the amount goes into collections, the hospital or provider’s office can set up a payment plan.

If not, a medical bill consolidation may help, as it allows you to combine all your medical bills into one lower monthly bill through an agency or a bank loan. This not only makes it easier on you, but the arrangement protects your credit score because you are able to make on-time payments. The downside is it may take you longer to pay your debt in full.

Benefits of Budgeting

Everyone can benefit from taking a pronounced and proactive approach to control their finances. Committing to your budget will help guide you into a much better financial position.

Budgeting can improve your life because it:

• Reveals waste. Creating a budget sheds light on areas that many people neglect on a day-to-day basis.
• Directs priorities. A budget allows for people to look at the big picture of their spending habits and set new priorities to maximize their money’s potential.
• Creates new habits. When people get a clearer picture of how they’ve been using their money, it allows them to shift expenditures into different categories, making them more conscious of unnecessary spending.
• Reduces stress. Finances are one of the top stress-inducing situations. When there is a sense of control over the money coming in and the money going out, the stress can transform into a feeling of empowerment.
• Educates. Having a budget allows people to view money as a tool, shifting the mindset to focus on long-term goals and future needs.

Creating a budget is the first step, but maintaining the budget is where you start to see real growth in yourself and more stretch in your dollar. Sticking to a budget can be a difficult task for people who aren’t used to spending boundaries or self-discipline in their finances, so it’s important to maintain a positive attitude toward the process.

Staying motivated can help alleviate some of the pressures of budgeting. Consider setting aside some money each month so you can look forward to a relaxing vacation at the end of the year.
Finally, set realistic goals. Start slowly, building up to a plan that works for you and your lifestyle.

The Finer Points

Wants vs. Needs

“You Can’t Always Get What You Want”, one of the Rolling Stones well-known 1960s hits, touches on an issue many of us face all the time. The message is you might not be able to get things you want, but if you try, you’ll get what you need.

How do you separate wants from needs and why bother? For many of us, knowing where to draw the line can mean the difference between creating a successful budget and going broke. So what’s the difference. Most needs are synonymous with non-discretionary expenditures. They include shelter, which demands payment of rent or a mortgage, and food, which results in grocery bills. There are plenty other items that are basic and non-negotiable, but the non-negotiable category leaves room for choice.

For instance, if you need a car to get to work, you could buy a used Kia sedan or a new BMW. The price difference is huge, and the Beemer is certain to impress your friends and offer a fine driving experience. The question is what can you afford? If you make a $500,000 a year, the BMW might be yours without stretching your finances. But if you’re taking home $40,000, it’s better to stick with the Kia.

The same rule applies to housing – should you rent a one-bedroom apartment or buy a $400,000 house? Again, both offer shelter, but at radically different costs.

There’s also the difference between needs and items that you could get by without. Think about taking a vacation to Thailand versus a week driving to state parks near your home. Both can offer satisfying and relaxing places to spend your downtown, but the costs are radically different. Also think about impulse buys. Say you go to home improvement store to buy some lawn fertilizer and leave with a lawnmower you hadn’t planned to buy. You might need a new mover, but it’s a good idea to research models and prices before putting your money down.

Knowing the difference between wants and needs is a key to a successful budget. You can budget for some impulse purchases or product upgrades, but understand what you’re doing, show restraint and always make sure your budget balances.

Seasonal Expenses

A sizable amount of your money is likely to go to one-off expenses that arise over the course of a year. Examples include holiday presents, birthday gifts, summer vacation costs and back-to-school spending. Some seasonal expenses are for stand-alone items like presents, others are for basics. Heating you home is an issue for the cold-weather months, for instance, and a higher water bill might coincide with irrigating your lawn in the summer. Clothing is also seasonal, with swimming suits for the summer and heavy jackets for the winter.

When you draw a budget, study your outflows during the past year or two and estimate the impact of seasonal costs, then build those costs into your plan. If your summer costs are much higher than springtime, make sure you save enough in the spring to fund spending in the summer.

Checking in on Your Budget

Budgets are living documents. Just as life is constantly changing, the demands on your budget change too. For that reason, it’s good to regularly review you budget to adjust for changes in income and expenses.

What should you consider? On the income side, you should make adjustments if you get a raise or receive a windfall like an inheritance. You need to adjust if you lose your job or move to a new one. Getting married or divorced requires a massive reworking of your budget. So does having a child. Sometimes the changes are smaller or temporary, things like a medical insurance copayment might require a temporary adjustment.

You don’t need to overhaul your entire budget when changes happen. Your rent is rent, and what you spend each month on your car is unlikely to change. But other things are more flexible. If you income drops, you might eat out less. If it goes up, you could save more, pay off debt quicker or make a discretionary purchase.

There’s no hard and fast rule about when to review your budget. Some financial consultants suggest doing it constantly, others suggest every several months. It’s probably good to consider revisiting your budget when life-changing events occur, and set intervals to adjust for smaller stuff like inflation and changes in fixed costs.

Automatic Saving and Recommended Percentages

You should strongly consider making automatic saving a part of your budget. What is automatic saving? It’s the money you set aside for funding an emergency account, paying for Christmas gifts later in the year or creating a college fund for your kids.

Automatic saving is best handled through paycheck withholding. If you’re saving for retirement and you company offers a 401(k) plan, sign up and have money withheld from your paycheck.  Many employers also offer medical and childcare savings plans, which are typically tax exempt. You can also have your salary automatically deposited in a checking account, then transfer part of the pay to a savings account that you don’t plan to touch.

There are many strategies for automatic savings. Talk to a financial adviser to learn more about the options and what amount of saving you can afford. Once you implement a plan, stick with it. Percentages will vary, but if your company will match contributions to your 401(k), save at least the maximum amount that will be matched. Other savings will be largely determined by your income and expenses. If you need to withhold 20% of your paycheck to cover the rent, make sure you do it. Knowing how much money you need and saving for it will make sure you meet your expenses and prepare for the future.

Financial experts have come up with recommended percentages for spending to help people budgeting for the first time. For example, it is suggested you spend no more than 30% of your gross monthly income on housing, whether you’re renting or owning.

Automobiles are the next biggest expense for consumers and probably the biggest temptation to overspend. The best idea is to keep spending between 10% and 15% of your monthly income. Anything beyond that stretches you thin, especially if a financial emergency arises.

Student loans might be another variable in your monthly budget. There are several income-based repayment plans that limit your payments to 10-15% of your income. That’s a safe number, but often will extend payments a few years and end up costing you a small fortune in interest charges. Try using 20% of your budget, especially if you don’t have a car payment or are splitting rent with roommates.

Other suggested percentages for ongoing expenses include utilities (10%); food (10-15%) and savings (10-15%).

Timing Your Budget

You should commit to staying on budget until you see results. The best way to accomplish this is to create an annual plan that covers your fixed costs like rent and car payment, your seasonal costs like holiday presents and vacations and your discretionary costs like eating out and buying clothes. Work all these things into a 12-month projection and follow it.

If you find flaws in the plan or your cashflow changes, you can modify it. Otherwise, try to stay with it. Consider using budgeting software or apps to help you. If you discipline yourself, you’ll be surprised as debts get paid, savings grow and your needs are met.

7 Debt Traps to Avoid

Payday Loans

Payday loans are one of the most obvious debt traps. These are small loans designed to "help you" financially until your next paycheck. Then, once you receive your paycheck, you repay the loan. However, in many situations, because the interest is so high, individuals cannot pay back the loan in full when it is time for repayment. (Another drawback with these loans is that they come with hefty fees attached to them, making them even more costly.) This can put the loan in default, or you need to take out another loan to repay the original one. It soon becomes a never-ending cycle of debt.

Credit Cards

It is extremely easy to swipe your credit card and buy anything you desire, even though you don't have any money. According to Creditcards.com, the average household has accumulated $9,600 in credit card debt.

When you only pay the minimum payment on a credit card with an extremely high balance, you are basically paying just the interest. You are making very little progress in paying off the starting balance. The average interest rate on credit cards is approximately 15 percent. In addition, you may have to pay annual fees or late fees on top of that, burying you even further in debt.

Debt Settlement

Debt settlement can have its benefits. Debt settlement programs involve a company working with your creditors to settle your debt, allowing you to pay less so you can dig yourself out of debt.

While the promise of debt settlement may sound alluring, it can damage your credit score. Bad credit scores can mean high interest rates on items such as a home or car. In addition, you may have to pay large fees for the debt settlement process, hurting you further.

Debt Consolidation

Debt consolidation is a lot like debt settlement. In some cases, this may not be a bad thing. However, you still need to be wary. When you consolidate your debt, you are extending the repayment process. You end up paying more in the long run. In addition, if you don't stay up on your repayments, you may face severe consequences such as higher interest rates or large fees.

Income Tax Refund Loans

A tax refund loan is when you receive a loan based on how much you are expected to receive with your income tax refund. The downside to these loans is you can expect huge interest rates, sometimes more than 60 percent. Plus, you may incur huge fees.

Home Equity Loans

This type of loan is simply setting yourself up for financial ruin. With a home equity loan, you use the equity of your home as collateral. The amount of money you can borrow depends on the value of your property. While this can be a fast way to receive cash, if you miss any payments and don't keep up on the loan, you could quickly lose your home.

Buying Too Large of a Home

When buying a home, you may want the bigger, more beautiful home. However, if you don't have the income to make those payments (and if you were to suddenly lose your income), you could be perilously setting yourself up to lose everything. When determining how much house you can afford, housing expenses should not exceed more than 28 percent of your income. If they do, keep looking. There are lots of good homes that won't eat up your entire monthly income.

While many American households struggle with debt, that doesn't mean that you have to. Being smart with your money and avoiding the debt traps listed above helps position yourself and your family for long-term financial security and happiness.

Best 10 Tips to avoid falling into a Debt Trap

Debt Trap? Well this is the modern day trap that most of us fall into knowingly or unknowingly even without actually understanding its rear consequences.
But to be honest this is not only the fault of mismanagement of personal finance but the trending new lifestyles, new desires and things which were once a luxury becoming day-to-day necessities.

Credit in all forms is made available to us in glamorous packages and is marketed in such a way that it penetrates deep within our minds creating an irresistible craving towards them.
“Why not give it a try? After all I am definitely eligible for this”.  This is where the actual trap story begins.

Going in for a credit or a loan just because it is well within our reach is the first mistake that is made most commonly.
Getting in to a debt is not a one-day task, it actually demands most of your years repaying them. This not only keeps you indebted but also poses a barrier when you are actually in real need of a loan or credit.

How to Avoid Debt?

Avoid Debt –These two words would sound simple & easy but when you try to implement them, you would realize the actual hardship hidden. Why should we avoid debts when we are worthy enough to get approved of one?

This is one query that might arise when we speak of avoiding debts.  But wait give this a second thought. Why should you take a loan/credit when it is not really a necessity?

Taking a credit or loan and buying something, which we have dreamt of, might give the feeling of attaining success. But the in-depth truth is that this feeling is often short-lived and within you realize the truth, you would have fallen in the trap of debt. Taking a loan is in no way a sin, but analyzing the actual necessity of the loan is where the smartness lies.

What is a Debt Trap – literally?

This is a stimulustechnique that is made available to the customer who is basically the borrower, which actually make them fall prey to long-term commitments with hidden terms and conditions that make the borrowers nearly impossible to come out of these debts.

Getting out of a debt trap is not an easy task. We often discuss about the ways and means to get out of a debt trap, but that is the second stage, why not perform the first stage of not falling into a debt trap successfully. This could certainly prevent us from going to the second phase of discussions to clear the debts.

Now as we have equipped ourselves with some basic know-how of debts and debt traps, it is important to know about the various mechanisms and practices to avoid falling in to such debt traps and to protect ourselves from learning the lesson the hard way.

Here comes the TTT (Top Ten Tips) to avoid falling in to a debt trap.

1. Use liquid cash only

When you use only cash for all your needs and shopping, you actually realize how much cash you are spending and this will psychologically make you spend less than spending with your plastic cards.

Also this will reduce the spending on your credit cards and thereby reduce your debts. Follow the golden rule of “Earn before you spend and spend only from what you have earned”.

2. Never cross the limit 

Spend from what you earn, does not mean that you can spend all that you earn. It is very important that you save a portion of your earnings and make it a habit. This will one day save you from becoming indebted.

3. Be savings – ready before you take a debt

If you have decided to go in for a loan in the near future, then start saving as much as possible from day 1 of your decision.  This will serve as the down payment amount and will reduce your loan to a great extent.

4. Make note of your liabilities:

Always be aware of your debts and the amount that you are indebted. This not only gives you a clear picture of your financial status but also limits you from entering into further debts.  Develop the habit of making a detailed note of your creditors and the amount you owe to them respectively.

Don’t just swipe your credit card just because you are not going to pay liquid cash. Swiping a credit card for your expenses is worse than paying from your pocket with ready cash, because interest accrues on the amount spent and the debt amount rises rapidly with hidden charges.

5. Minimize the number of your credit cards:

Having a number of credit cards is not a matter to be proud of, it only makes you all the more indebted and your chances of falling in to the debt trap certain. Try managing with one card and use that only in cases of real emergency.

6. Surrender your extra cards: 

Having a number of cards in your pocket, means you are going to be all the more tempted to use them on unnecessary expenses. Human mind can never be satisfied. So it is a wise move to surrender all your extra cards and help your mind be in control.

7. Convert your debts into EMI’s:

Once you have decided to surrender your cards, you might be required to settle the balances on them. So it is better to consolidate all the balances and work out a reasonable monthly installment repayment plan and settle the dues as soon as possible.

8. Pay your Bills on time: 

Make it a habit to pay all your bills on time and as far as credit cards are concerned, don’t just pay the minimum amount due but clear off the entire amount due by each month. This would prevent the balances accumulating and interests being accrued and your debts increasing. 

9. Never use your savings to pay your credit cards:

Credit card payments are to be made from your earnings and not from your savings. You should not allow your balances exceed the permissible limit. If it ever happens, go in for settlement options through EMI’s. But never ever break your savings to pay for your credit cards.

10. Pay your dues evenly over all your loans:

While paying off your debts, ensure that you pay all your debts in an evenly spread portfolio. Make sure that your DTI ratio doesn’t get affected.

Today we have a scenario where in most of the educated youth are often stuck in unmanageable debts. This may be to the student loan debt that they would have utilized and other debts that they would have accumulated over the years. The whole picture is even coined as “Generation Debt”.

When we look at the general facts about Student loan debts, we would be rather shocked.  A recent report reveals the following facts:

• The total U.S. Student Loan Debt touches a whooping $1.26 trillion
• The number of Americans with Student Loan debt stands at 43.3 million
• The delinquency rate of student loans is at 11.6%
• The Average and Median monthly student loan payment for students aged from 20 to 30 years stands at $351and $203 respectively.

To make things more precise, the average student who graduates will have an enormous $40000 as his student loan debt. But this can be dealt with in a wise manner.

What are the options to reduce student loan debts? 

• Make sure you put the option of grace period to maximum use. Start saving the installment amount right from the beginning. Just because you are not required to pay during the grace period it does not mean that you could spend the money unnecessarily. You can later use this saving to pay a down payment for your loan after your grace period, thereby reducing your debt levels.
• Do a thorough research of the details of the loan and its features. Get to know who the exact lender is? How much is your outstanding? What are the available repayment options?
• Once you are done with ample research, now it is time that you choose a suitable repayment option that best suits your income and lifestyle patterns. Also consider loan consolidation to ease your payment process.
• Adapt a simple lifestyle, well at least until you come out of your debts. Live simple and spend as little as possible. All these little sacrifices are really worth your debt-free and peaceful future.
• Formulate a budget and learn to stick to your budget.

Scholarships & Grants:

There are a lot of scholarships and grants offered to students who pursue their education and help them in reducing the loans that they apply for. But there are students who don’t become eligible to such forms of scholarships or grants, or sometimes their education costs exceed the grant amounts, forcing them to go in for loans.

There are no such grants and scholarships to repay the student loans. However, the student loan debts have to be repaid and there are a lot of options and ways by which this can be done.

• PSLF (Public Service Loan Forgiveness) – If you happen to be working in a public sector, your federal loans may be forgiven after 10 successive years of payment. This is possible if you are a full-time employee in a government sector.
• Employment – based Opportunities – Depending upon the type of employment you choose, you might be eligible for such programs wherein a portion of your loan gets forgiveness or you receive grants and awards for your services. Such professions include Doctors, nurses, attorney’s and Teachers
• IBR – It is the repayment plan, which is based on your income structure. This helps you program your monthly payments according to the income you earn.
• Peace Corps – If you volunteer with Peace Corps for a period of 2 years, your Perkin’s Loan might be partially forgiven and if with the extension of your volunteering service, the forgiveness amount would also increase.
• Americorps – If you are a person who wants to work for a social cause in resolving community issues, working with Americorps is the best option. You not only get to realize your dreams but also receive stipends, rewards and grants.
• SponsorChange – This is a platform that provides opportunities based on your skill-sets and in exchange for your skilled labour, they offer to pay your student loans.
• Zerobound – This is actually a crowd-funding platform wherein you volunteer for a campaign and the sponsor’s pay each volunteer according to their talents.
• Givling – This is also a similar crowd-funding program like Zerobound. Once you register, you have to wait for your turn to get your loans paid off.

All these options come as a boon to students who are stuck up with student loan debts. Though these are not official grants, you can rely on them to help you to reduce your student loan debts.

Inference:

It is an undisputed truth that in this fast- paced world desire-driven world; people often tent to fall prey in to the so-called debt trap. It is our duty as responsible individuals to stay on vigil and carefully monitor our lifestyle patter.
Always have in mind the often-neglected proverbs – “Look before you Leap” – “Think Twice before you act” – “Slow and steady still wins the race”. All these proverbs are sure to give an in-depth insight about the reality of life.
Formulate a more disciplined life style and spending pattern. Only spend what you have earned. This not only means that you will be out of debt but also this acts as a psychological barrier to spend more, because you know how hard it is to actually earn that money.
Always stay employed, don’t wait for that dream job or that perfect job. No doubt you will get to it one day, but in the meanwhile keeps yourself self-sufficient by staying employed. Only that will help you to avoid falling into a debt trap.
In most cases, the biggest opponent you encounter is not your financial inability, but your own mind that is in all means alluring to spend more. While winning over your adamant mind is really a tough task, always remember contentment is the key to live debt-free and in ultimate serenity.

13 Mind-Blowing Tips to Increase Concentration in Kids

“Can’t you just stop fidgeting and finish your homework?” I’m sure we’ve all asked our children this at least a few dozen times while they’re studying. I know I have! As a mother of a vibrant, fun-loving, talkative eight-year-old girl, it is often a challenge for me to get her to sit in one place, focus on her homework and finish it without getting too distracted. And yes, I say “too distracted” because children are naturally energetic and exuberant and we cannot expect them to focus completely and not get distracted at all! But, having said that, it IS possible to help children increase concentration skills and focus on a task for a longer period of time.

Before we head there, here are a couple of things you need to understand…
Children are naturally curious with unmatchable energy…
And the main reason they face these concentration issues is because they are wired differently.

When the task they’re given isn’t fun, they get bored and quickly shift their attention to something more interesting — unlike us adults where we complete tasks whether we like it or not!
Having said that, there are ways to help improve your child’s concentration quickly and easily. Take a look!

13 Techniques To Improve & Increase Concentration In Kids

1. Playing helps build concentration!

Since children learn more by playing, it is always a good idea to try and make their activities a little more fun. Keep away gadgets, tablets and computers and allow children to play with regular toys, activities that improve concentration, and concentration exercises.
Studies have shown that gadgets actually reduce attention span of children so they should be used sparingly or not at all.

• Thinking games – You can train and strengthen a child’s ability to concentrate and focus by playing concentration games that require thinking, planning and the use of memory. Crossword puzzles, jigsaw puzzles and card games such as ‘Memory’ and ‘Uno’ actually improve attention for words,numbers and pictures, while picture puzzles—in which your younger child has to look for things that are ‘wrong’ in the picture or look for hard-to-find objects—also improve attention and increase concentration.
• Sequencing – The link between sequencing and concentration is a strong one. Following recipes, setting the table and putting things in alphabetical order are great activities for kids who have concentration difficulties.
• Just sit – This game involves challenging your child to sit in a chair without moving or fidgeting to see how long he can do it. Another concentration game in this category is ‘Statue!’ Through repeated play, the child’s brain is ‘exercised’ and challenged, which strengthens mind-body connections and improves focus.
  

2. Prepare the environment
Some children respond well in an environment that is soothing and calming but other children may thrive in an environment that has a lot of hustle and bustle. Understanding what kind of environment your child prefers to study is the first step to increase concentration level in him/her.

• Ambience – Soft instrumental music and soft lighting helps to set the mood for studying. “Manav used to be quite hyper all the time, but after I put a fish tank in his room, I find that he has calmed down quite a bit!” says Kalpana, mother of 4 year-old Manav. “I think just watching these fish calmly swimming around has had an amazing effect on him!”
• Gadgets – Ideally, all gadgets including televisions, iPads, cell phones etc. need to be switched off or kept in a different room to avoid distractions. If you need to use a computer to study, make sure that it is used only for studying and nothing else.
• Reachable material – Keep everything that is required at hand so that your child does not need to get up to get anything. All homework books, crayons, textbooks, pencils and even water can be kept on the table or nearby. This also helps keep track of how much work is left and helps you to manage your time better. All these help improve focus and increase attention in kids!

Understanding the environment your kid prefers to study is the 1st step to increase concentration.

3. Healthy eating
Eating healthy food has a direct link to how well a child concentrates. Eating junk food or food rich in sugar makes a child sluggish while food rich in proteins such as almonds, eggs and lean meat have the ability to raise awareness and increase concentration levels!

• Caffeine – A recent trend in the US shows that children have increased their intake of coffee and caffeinated energy drinks. This gives them an unhealthy dose of sugar which can lead to a “crash” of energy later.
• Green food – An interesting study in the University of Ulster, UK shows that eating toast and baked beans for breakfast increases cognition. Experts say that eating greens and fruits inject the body with antioxidants which in turn boost your brain power.

4. Routines are important!

Anita, mother of 4 year-old Rahul has everything planned to a T. “Rahul comes home from school at 3.30 pm and has a snack. At 4 pm, I take him outside to cycle or play with the neighbourhood children.”
“At 5 pm, he is back home, has a wash and snack and is at his study desk by 5.30. He studies or does homework till 7.30 pm after which he has his dinner and is in bed by 8.30,” she says.
While we don’t need to be as regimented as Anita, it is important to maintain a schedule for your child, even if it is a more flexible one. This not only helps with time management but also helps program your child’s brain to know when he has to study.

And this in turn helps to increase concentration! For example, Rahul knows that after playing, he has to study and automatically gets into “study mode” once play is done.

5. Naps and breaks boost concentration!
Most children are able to concentrate best after a good nights’ rest.
A power nap for twenty minutes after school or in the afternoon should also do the trick to increase concentration.
All bathroom breaks, hunger pangs etc. should be taken care of before the study time begins as they have the tendency to interfere with concentration.

A power nap for 20 minutes after school or in the afternoon helps increase concentration.

6. Divide bigger tasks into smaller tasks
Studying an entire chapter in one go is quite difficult for a child. It always helps to break it down into pages or even paragraphs so that the child feels a sense of accomplishment for finishing a small task and this will motivate him to continue on.
This is true not just for studies but for household chores as well. Nita, mother of 8-year-old Ankit says, “I had been nagging Ankit to clean out his cupboard for weeks but he never got round to doing it.”
“Then I started breaking it down and I’d tell him ‘today you need to do the bottom shelf’ and sure enough, by the time I get back home in the evening, it would have been done!”

7. Understand your child’s method of learning (visual, auditory, kinaesthetic)

All children learn in different ways. Some children process information easily when they see it, some when they hear it and some when they have practical knowledge of it and can touch it.
It is important to understand which category your child falls under, mostly because this will help them understand information better and the learning will be more long term than short term.

• Visual – Children who are visual understand information better when they are able to see it. In this case, the child will be able to concentrate better if she is allowed to read the information and write it down as well.
• Making flash cards – If your child is learning spellings or even concepts, writing them down on small cards and repeatedly showing them to her will help her understand and learn these concepts that much faster.
  

• Drawing – Asking the child to draw what he is studying may also help him visualize the material better. A bonus is that this also helps his fine motor skills to develop.
• Doodling – Often, we see our children scribbling while studying and think that they’re distracted but what really happens is that the doodling helps them recall what they have been studying at that point and so remembering it at a later stage becomes easier.
• Auditory – Children who learn better when they hear information are auditory in nature.
• Reading aloud – Children who are auditory in nature learn better by reading the material aloud or listening to someone else reading. In this regard, they might find audio books more helpful than paperback books.
  
• Music – Listening to music while studying may also help these children increase concentration and remember better.
• Kinaesthetic – Children who are kinaesthetic need to be able to touch and feel their subject matter to understand and process it better. For these children, learning by practical applications may be more helpful than reading aloud or writing. “When my child was learning about planets, I took him to the planetarium and when we got back home, we sat together and made a model of the solar system and coloured it. Ever since then, he has never forgotten the order of the planets or which planets have rings etc.” says Nina, mother of 5-year-old Prakash.
  

8. Prepare your child for the next task

When your child is busy, tell him what he has to do next, but allow a few minutes, till he stops and starts the new activity.
This helps, especially when a child is engaged doing something he likes and enjoys doing, since there would be reluctance to stop what he is doing and start something else.

9. Set short time goals for better concentration

Set a time limit for the completion of a goal. If it is studying, then you can say that a certain number of pages need to be done within twenty minutes.
Keep in mind that the average time for an adult to concentrate completely is about 42 minutes and so the concentration span of a child would be much less. Therefore, it would be wise to have shorter time limits such as 15 minutes to 20 minutes.

Another thing to keep in mind is that while some children thrive under time goals, other children might feel pressurized and may start feeling anxious and lose focus.

10. Reward system
Rewards don’t necessarily have to be tokens such as chocolates or toys.
They can also be in the form of praise or even further studying! Says Anushka, mother of 7 year-old Mansi, “My daughter loves to solve maths problems so as a reward for studying Hindi which she hates, I allow her to do a page of sums.”
This is sure to help build and increase concentration, right?

11. Allow time for distractions

Kids are naturally energetic and exuberant. Giving them time to vent out their energy once their time limit for a task is up may actually help them focus better on the next task!
It would help if your child did something completely different during this time.
For example, Shantha, grandmother of 8 year-old Shifrah says, “When I’m teaching my granddaughter spellings, we do 10 spellings at a time after which I allow her to run or skate around the house for a minute or two. I find that this helps her focus on the next 10 spellings.”
She finds that mixing a physical activity with a mental activity is very effective.

Giving time to vent out energy may help children focus better on the next task!

12. Use energy effectively

Some children have high energy in the mornings while others have high energy in the evenings.
Studying or doing activities during this time will help your child focus better on the task at hand.
Always start your child on the tougher activities during his high energy time.
As energy levels go down, you can always switch to a lighter activity.

This will help to increase concentration power!
13. Deep breathing and imagery
Combining simple relaxation techniques such as deep breathing with positive visual imagery helps the brain to improve or learn new skills.
For instance, you can ask a child to close her eyes and imagine that she is paying attention in class.
In her imagination, what can she see?
What can she hear? What is distracting her?
You can further ask her to imagine how she would take care of those distractions.
Once she is able to clearly picture this, you will find that her behaviour at school also changes!

Conclusion

Like any skill, concentration can be improved and made automatic. The trick is to be consistent. These 13 tips to increase concentration power are a win/win solution, because they not only help improve concentration but also strengthen the relationship that you have with your child.

Don’t forget to share these tips to your friends & family. And do let us know which worked best for you & your child, in the comments below.