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How Did I Get In This Mess?
By Terry Rigg
When I was younger and having all kinds of money problems, I ask
myself this question a thousand times. 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.
For most people, there are too many expenses for the average
individual or family to keep track of in their head. You have to take
what ever time you need to put this information down on paper after
considering all of your possible expenses. You can do this on a piece
of notebook paper or find a simple budget form. Which ever way you
choose, make sure that you review it before you make any purchases.
As I stated before, it is necessary to know what events led to your
money problems so that you will know what actions to avoid in the
future. This will be vitally important on the road to your financial
recovery.
For an easy to setup and maintain budget, visit:
http://www.homemoneyhelp.com/BBOonline.html
Terry Rigg is the author of Living Within Your Means - The Easy Way
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.
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