When I was younger and having all kinds of money problems, I ask
myself a thousand time how I got myself in this mess. It seemed
like one day we were doing fine financially and the next we owed
everybody. How can it happen so quick?
This is a problem that a lot of people are experiencing today.
It can be one of the most helpless and frustrating situations
most of us can find ourselves in. To make matters worse, it
seems the harder we try to get a handle on our finances the
deeper in debt we become.
There isn't an answer that covers everybody, naturally, but I
believe that in most cases we simply weren't paying close enough
attention to the details of our finances. We figure that an
extra payment here or there won't make a difference, until it's
too late.
I know for myself and most of the people I have counseled over
the years, that it wasn't until we took a good hard look at how
we got ourselves in debt, that we were able to start working on
a way out. This isn't for the purpose of placing blame, but is
necessary to determine what changes needed to be made and to
prevent it from happening again.
I have found that very few people, including myself, have ever
been taught even the basics of proper money management, either
at home or at school. This hit home when I had to teach all
three of my kids how to fill out and maintain a check book,
after they graduated from high school. I assumed that they would
learn this in school. I realize now that I should have been more
aware of what they were not learning and accepted the
responsibility of teaching them the fundamentals of handling
their money myself. That was my job.
If you are just starting out in the work force or going to
college, it is time for you to learn that you have to work at
managing your money, everyday. It is essential that you learn as
much as you can about setting up a budget and using every
expense cutting method you can think of. Even if you are making
good money you need to know exactly what you have coming in and
what you have going out. There are a lot of people making
$70,000 or more a year that are having money problems.
There usually isn't just one thing that causes us to accumulate
debt. It can be anything from buying more house than we can
afford to running our credit card balances to the hilt. It
almost always happens a step at a time.
Let me give you an example: You buy a house with payments that
are more than you wanted to pay, but it is exactly what you were
looking for, so you decide you can cut back in other areas. Now
you've used all of your cash for the down payment on the house,
but you still need furniture. It's time to break out the credit
cards. You don't realize just how much the furniture, curtains,
pictures, rugs, etc. will cost. Now your credit cards are
reaching their limit. Then the electric bill comes in and it
is double what you were expecting. This can all happen within
just a couple of months.
The above example may not fit your situation, however, chances
are no one purchase caused the problem. This is why it is
absolutely necessary to pay close attention to your finances
and plan every purchase. The only way to know if you can afford
something is to have a budget in place.
About the Author
Terry Rigg is the author of Living Within Your Means - The Easy
Way http://www.homemoneyhelp.com/ebookadpage.html and editor
of The FREE Budget Stretcher Newsletter and Budget Stretcher
web site http://www.homemoneyhelp.com. He has 25 years of
experience counseling individuals and families concerning their
personal finances.