Over Spending What A Mistake

Have you found yourself in a huge financial mess?   It happens to more people than you can imagine.  It is a horrible situation for anyone that finds themselves overdrawn and underwhelmed.  The very sad thing is that most of the time this horrible situation can be avoided by simply living within your means.

Over Spending

Stop spending so much moneyOver spending has taken a toll on many Americans.  We live in a society where we want instant gratification and we do not like to wait to get the things we want.   Furniture companies entice us with zero percent interest, and payment plans that stretch on for years and years.   Car dealerships offer what appear to be great programs to put you in a nice new shiny car.   Clothing stores jack up prices and then throw a big sale so you feel like you are getting a good deal.   All of these things plus many more put us in a position to easily over spend and go beyond our budgets.

What Is The Status Of Your Savings Account

Are you able to put money back each month into your savings account so you will be ready for when an emergency strikes?   So many Americans tend to over spend each month to the point that there is no money left for the savings account.  We are not following the pattern of our grandparents where they automatically put money back into savings so that money would be there when they need it.   Granted with inflation and prices in our economy it is harder to have any money left over to put into the savings account, but when you pile on over spending the savings account gets left in the dust.   The immediate gratification of getting what you want now, will leave you feeling down and out when an emergency creeps up and you have no where to turn.

So How Do You Get Out Of The Mess

There are so many ways to get out of the financial mess you have found yourself in.  You will need to do whatever you can to stop over spending so you can at least get back on level ground.   Once you have stopped your spending urges you will then need to get on a budget.  I know that doesn’t sound like fun, but it is the first step to digging yourself out of the mess.   You may also want to look at generating more income, find areas you can stop spending, and spend the smallest amount you can to survive.   Pump as much a money as you can into a savings, and use the rest to pay down your debt.   If you will take a look at your monthly spending you will be surprised how much money you can save each month simply by cutting out unnecessary spending.

You should also seek the advise of a financial professional.  There are plenty of people willing to lend their ear and give you advice.  Make sure you are getting advice from someone that actually knows what they are talking about.  If you do end up paying for advise make sure you are seeking the counsel of someone qualified to provide financial advise.   You do not want to waste your money on bad advise.

Good luck and take the first step of cutting out the over spending.

More information can be found at:  http://www.wikihow.com/Stop-Spending-Too-Much-Money


7 Tips To Saving Money

The verification of consistent cash short-falls at the end of each month is a strong indication that saving money is an issue. Though it may seem obvious, the identification of the problem is an important first step toward working toward a solution. The following savings tips should be useful to those under financial duress as well as those who seek to raise enough resources to meet longer-term financial goals.

Before you get to my list, watch this quick video on other ways to save money

Now on to the 7 steps in my list:

Track Your Expenses

Every saving decision begins with the itemization of monthly expenses. Jot down every expense in a spreadsheet or notebook. At the end of each month, compile these items in groups such as restaurants, supermarket, entertainment, rent/mortgage, gas, etc. A bird’s-eye view of expense categorizes may reveal surprising patterns of consumption.


Manage Debts Prudently

Outstanding debt must be managed with care. Keep tabs of monthly payment dates to avoid fees and penalties that can impact your ability to save. Also, avoid debts that do not build net worth such as auto and consumer loans. Retail items and automobiles, after all, depreciate over time. Mortgages, on the other hand, generally require lower yields and help build an asset base (ie, a home) that historically has increased with inflation.

Define A Budget

Once expenses have been mapped out, a monthly budget must be drafted. This should serve as a road map for saving money. Historical overallocation in restaurants (say, 60%), for instance, may be an indication that the family is spending too much on outside dining — and indicates an opportunity for savings. Be sure to include recurring items as well as miscellaneous expenditures.

Establish Reserves

Financial emergencies such as the sudden need for expensive surgery or loss of a job can befall anybody. The ability to withstand such hits depends on financial preparedness. In the absence of such a cushion, the family may need to resort to expensive funds such as credit card loans. A solid rule-of-thumb is to build a 6 to 12-month rainy-day reserve. This should be provisioned in the monthly-budget.

Avoid Temptation

Occasional trips to the mall to upgrade a wardrobe are okay in moderation. But it is important to understand your penchant for consumerism. If you cannot resist a trip to the mall without returning home with multiple purchases, avoid or reduce the frequency of such visits.

Change Your Habits

Small changes in habits can yield surprising results over time. Small adjustments include: a reduction in the time spent with the shower running or browsing food with the refrigerator door open and the use of shopping lists at the local supermarket to avoid unnecessary purchases. The use of public transportation and car-pooling are savvy initiatives to save on gas.


Manage Your Investments

Saving money at the end of the month is a noble feat. But investing the cash wisely is just as important — if not more, due to the power of compound returns. Once cash is set aside, the next step is to evaluate the time frame you have in mind for your financial goals. The cash provisioned for emergencies is best kept in a money-market fund. Resources marked for retirement can be allocated in stocks, mutual funds and long-term bonds.


Other great saving money resources can be found here:  https://en.wikipedia.org/wiki/Saving

Tackle Your Debt

Today let’s tackle your debt.  Let’s face it basically everyone faces debt at some point in their life.   To be honest dealing with debt is no fun at all.  It can physically make you ill, or simply make you feel disgusted.  Do not fret, you are in good company and so many people are in the same boat.

Let’s tackle your debt step-by-step.

tackle your debt

Step 1: Put your debt down on paper.  Create a spreadsheet that shows the balance you own, the interest rates you are paying on each line of credit, and the monthly payment you are currently paying.

Step 2: What are you goals for getting out of debt? Be specific with your goals.  Write down timelines for getting out of debt, list if you want to be debt free, or just out from under one specific bill.  Look at your goals and figure out how much money you need to throw at the problem in order meet your goal.  This will help you find out where you can make cuts, or find a part time job to meet the goal.

Step 3: Do you need to refinance your home or consolidate bills?   These two options can be great ways to tackle your debt.  Finding non-traditional loans to consolidate your debt are easier to find than you may think.  You may even have to think outside the box to come up with a solutions.  Maybe you take out a home equity loan instead of a traditional loan.  The key is to reduce your overall monthly interest charges so you can pay down principal faster.     Depending on interest rates, it may make sense to refinance your mortgage and reduce your monthly payment.  You can then use the saved money to apply toward debt reduction.

Step 4: Pay more than the minimum.  There are so many ways to tackle this one but the best thing is to start paying down the debt.  You cant take the option of paying off the highest interest loan off first, or take the snowball method of paying off the lowest balance first.  It doesn’t matter which one you choose, as long as you start paying more than the minimum due.  By paying more than the minimum you can reduce the amount of interest you are paying, thus getting you out of debt faster.

Step 5: Create a budget plan.  This one should probably be step #1, but honestly I think it is hard for many people to think about a budget before they even know what they are spending each month.  After you have your debt listed on paper and you figure out what you need to do to reach your goals, then you can create the budget that will get you to your goals.  That is why I listed this one at the bottom.   In all honest you an put these steps any order as long as you are working on reducing your debt.

Here is a great resource on how to budget your money.