The people who know exactly how much they spend by the day are in the minority. Most people have a general idea if only because they read their bank statements. Direct debits can pay regular bills, any relevant instalments and the balance at the bottom of each statement is an indicator of how well income is being managed; are the figures in black or red?
Have you promised yourself that you will begin to be more careful with your money but never managed to actually do anything? It is very easy to write down a simple budget with an income column on the left and expenditure on the right. Simply doing that is of little value if you do not take the detail into account when you make financial decisions.
Can you Afford It?
If you are spending more than you are earning, and constantly doing that you are living beyond your means. You will not be able to make proper plans for the future whether that is building up an emergency fund or perhaps even more importantly you will not have the level of asset that you will need in retirement.
You have to be able to see the figures in black each month as a general rule but what are the specifics? There are some short cuts to your improving your situation but the success of establishing a firm financial base depends upon planning, discipline and determination.
Expensive Debt
There is no short cut to identifying spending habits on a daily basis. If you regularly use your credit card then the monthly statement will do some of the work for you. It may not make good reading especially if you are finding an increasing balance because you are unable to pay off everything at the end of each billing period. You should not leave anything out when you are recording your expenditure. If the picture looks bleak then you have to begin to make plans. That involves making wise decisions on your expenditure and trying to pay off expensive debt such as the balances on your credit and store cards.
Loans
There are online lenders more than willing to look at sensible applications for just right installment loans. One that is backed by the applicant’s regular monthly income and apparent ability to make the monthly installment repayments for the whole term of the loan is likely to be approved. Imagine the scenario where a single loan can be used to pay off all your expensive debt and how much it can potentially save you month by month!
The Importance of Saving
What should follow is a plan to save. If you are burdened with debt it is unlikely that you are putting any money to one side either to create an emergency fund or to make proper provision for retirement that comes to everyone one day. The chances of a comfortable retirement are minimal if you think that the Social Security System in the USA will guarantee it. It is in trouble; people are living longer and the number of people paying into it is falling. The fund will continue to dwindle without increased taxation which is currently very unpopular; and may remain so, particularly if there is a Republican Congress.
The recession of course destroyed the plans of many people but at least it has receded and unemployment figures have fallen back to pre-recession levels. It means that there should be no overnight shocks; unemployment and no means of meeting simple living expenses. However that does not automatically guarantee that you will be able to live without any financial stress. You may choose to ignore the balances on your credit card statements because no one is demanding full payment from you but you are building up problems for the future.
No business succeeds without a budget which is amended as circumstances change. No individual can expect to live problem free unless he or she make similar plans and follows them. Paying off expensive debt and beginning to save should be two decisions that you take as a matter of urgency if you are to avoid the sleepless nights that are a consequence of financial problems. Think about it and start to make your plans.
