Are Your Personal Finances Spinning Out Of Control?

by Hank

Spinning out of control...Do you often end up looking at your bank account to find less money that you had thought was there? I used to always pick on my wife when we were dating because she would check her bank account balance on the automated phone system. That is how she balanced her checkbook. She never reconciled her bank statements. It never failed that there was always less money in the account than she thought should be there.

Do you end up having to ask to borrow money from friends and family, just to end up in an even tighter situation to return it? Do you feel that although you can afford many of the things up for sale at the mall, you never seem to have enough cash to get them? If the answer to any of these questions is ‘Yes’ then your personal finances may be out of control. In addition to earning the money that you do, properly managing it is an important step towards living a life without any financial worries.

Here are a few simple steps that should help you start to dig out of an unseemly situation…

Start Budgeting. It might sound nerdy or unnecessary, but keeping an account of how much you can spend and where you plan to spend it is an excellent way of making sure that you are spending the money in the right places. Financial guru, Dave Ramsey, says that you should have a written budget every month where every dollar has a name on it whether it is for your electric bill or your car payment. You know where it is going before you even get it in your account. You do not have to call up your accountant friend to figure your way around this one. All you need to do is to note down all your expenses for a single month in one place. Write down your income next to this list and get a grip on where the money is going. After making some reasonable judgments on where you should be spending less and perhaps things that you should be spending more on, make a rough plan for the coming month. Repeat the exercise a month later to see how you really spent the money as compared to the plan.

Learn Self-Discipline. A simple and yet effective way of handling a personal problem such as a financial one is to learn to control yourself. We all have those moments of impulsive purchases and unnecessary spending, like getting a dress that is way out of your range or eating out at fancy places much too often. If you have recognized that there is a problem, start being conservative in your spending.

Cut Costs. Part of the budgeting exercise, is to look at your major expenses and compile your bills to find any part of them that have been unnecessary or a luxury that you just cannot afford. Get rid of unwanted magazine subscriptions and extra channels on cable. Get a payment plan for your phone that saves you the most money and find out ways of cutting your electricity bills.

{ 1 comment }

Jerry March 20, 2010 at 6:54 am

I never failed to amaze me how many people in the military – who have so much discipline in other areas of their lives – have no insurance of financial discipline whatsoever! This leads to disaster in many instances… I saw many Sailors and Marines dig themselves into dire straits simply because of an inability to balance a checkbook or manage spending.

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