Step Three: Find Out Where Your Money Is Going

Where is Your Money Going?

If you’re like most people, you need to live within your means in order to accomplish your financial goals. This requires you to spend less than you earn and invest your savings intelligently to put yourself in a position that allows you to start saving. We first need to take a closer look at spending habits in order to erase or clear debt.

Most people earn just enough to get by, and some not even that they simply just spend more than they make the results of these spending habits is an accumulation of debt, which accounts for trillions of dollars in the US today. Many of the influences we see in society today are always encouraging you to spend credit is easily available and more often than not. We are referred to as consumers were not referred to as people human beings or citizens, even on the nightly news. We are often referred to as consumers.

Control Your Financial Future

If you are going to attempt to control your financial future here are some of the big guns. You’ll be up against as we both know, spending money is easy, but thanks to innovations like credit cards and ATMs your money is available 24 seven. In every little outlet and every mall and gas station across the street down the road. You name it we can practically use Visa cards and bubble gum machines these days. Sometimes it may seem as though banks are trying to give the money away, making credit. So available, but keep in mind this money is a dangerous illusion. When it comes to debt, auto loans, credit cards and such lenders don’t give away anything except for the chance to get you in over your head saddled to high interest rates and delay your future and financial goals.

Credit can be a dangerous thing. Especially when you make consumptions and purchases that you can’t afford in the first place. The modern-day bank card was invented by Bank of America and grew up with the baby boomers if you pay your bill in full every month. Credit cards will offer you a convenient way to buy things interest-free in other words a short term loan. But of course, they know you’re not can pay that loan off in 30 days or less. Therefore, they get to charge you high interest rates, and these credit cards encourage you to live beyond your means and make it easy and tempting to spend money that you know you don’t have.

Erase the Worst Debt First

Some people will never pay off their credit card debt. If you keep charging on it and making only the monthly payments, interest rates will continue to pile up, along with fines and fees and the maximum interest rate allowed by law. These compounding penalties, interest rates and charges can go on for years, and in some cases indefinitely if you let them. If you have a knack for charging like wildfire and spending more than you know, you should with credit cards the way I see it. Only one real solution exists. Throw them all in the garbage cancel the accounts. You can live without credit cards. You don’t need to live beyond your means and you’re saddling yourself and your family with the responsibility to pay future debts that you can’t afford and you don’t want to swipe your family’s future away with credit cards. Those companies are in business for a reason and they make millions and even billions of dollars for a reason. And that’s consumers irresponsible spending. They count on it and they look forward to it. I caution you to not be a part of it put a stop to it today.

Whenever you sit down at a car dealership and start talking with the salesman about what you can and can’t afford the me start with this. If you can afford to pay for it and drive it home. You can afford it but notice the salesman, never talk in those terms. They talk about monthly payments and what kind of payments you can afford. How much can you afford per month? Go and auto loans are so easy to get anyone can get one. And I bet you’re tired of driving around in that old Junker dance and scratches. It’s probably a breakdown soon anyways so off to your local car dealership.

You smell that new car smell. Think about a five year warranty and look satellite navigation. Wow, XM radio, six disc CD player and a moon roof that works before you can even find the power button on the stereo. There’s a salesperson. He’s agreeing with you telling you how nice this car is. He’s not talking to you about whether or not, you can afford it. Next thing you know, you and your new best friend are driving down the road in what could potentially be your new car sales person doesn’t ask you how much money you make any doesn’t seem to care.

He doesn’t talk about how much the car cost, and you’re thinking to yourself. It’s not all that much you actually thought it would be more. Next thing you know, you’re the proud owner of a brand-new car. There’s a reason the dealer wants you to think in terms of how much it will cost each month. What’s worse is what you will end up paying for that car over the course of five years when you include interest, tax, title registration gas, maintenance, insurance and all the other little things that go with a shiny new car. Most people would be surprised to learn just how much of their salary annually. They just signed away the pretty new car.

Something less talked about in this day and age is going bowling with some friends on Friday night. Your board go somewhere or do something you out to dinner or going to movie. Even bowling doesn’t sound bad. Let’s face it, some people have to wear the best clothes, see the movie the moment it comes out have the newest cell phone with driving directions even though they never leave their hometown. When was the last time you invited a friend out to dinner and he said. Oh, I think I’ll pass, because I’m saving for retirement. That’s just not something you hear very frequently. It’s easy to overspend hoaxes and it this leaves us all to work away for entirely too many years at jobs we hate. Like hamsters on a treadmill.

Seize the Day Does Not Mean Empty Your Billfold

Living for today has its ups and downs right? No once promised tomorrow, but chances are good there will be a tomorrow so if you have that nice dinner and see that new movie when you’re wondering how to pay that last bill at the end of the month. You will be disappointed, because again you didn’t stick with your goals your spending habits need to coincide with your plans. Not you’re desires, and not the desires of others. You need to set goals; you need to know how much you should be saving. Life is full of problems and stresses you work hard right. You deserve the occasional indulgence.

You had a tough day at the office. So you deserve dinner in a fine restaurant feel, better yet? You won’t have to pay the bill and the more you spend, the less you save, and the longer you’re the hamster we all trade time for money. The question is, how much of your time you willing to trade are. People have addictions of all kinds drugs, alcohol, shopping. Many people become addicted to spending women get a high from shopping. Some of this can be identified with your childhood, but how long can you blame mom and dad for your bad decisions?

Taking care of yourself and eating a healthy diet with plenty of fruits and vegetables, and having good exercise habits, spending less than you should and saving to meet your future financial goals are all good habits. Even though we as Americans earn excellent incomes compared to the rest of the world. Most of us have a difficult time saving for our future, because we spend far more than we should the first step to saving a portion of your income is to figure out where the money is being spent and analysis of your spending to help you determine where your money is going. Are you meeting your savings goals every month?

If you’re saving plenty of money to accomplish your financial goals, and there isn’t much value in tracking you’re spending. You’ve est. good habits and tracking your money month after month is not a good habit as long as you’re meeting your savings goals. Who cares where the rest of the money is going right. You can still benefit from pursuing smarter spending habits knowing where your money is going each month can be quite useful and making the necessary changes in your spending habits and trimming the fat. So to speak, so you can save more money and meet your financial goals faster is a terrific idea. Remember, saving what you need to achieve your goals is what matters most.

Purchases you make with cash are the most difficult to track because they don’t leave a trail over the course of any given month. You could potentially keep a record of everything you buy with cash keeping track of your cash can be an enlightening experience, but it can also be a pain in the neck. If you’re lazy and lack the time and patience it takes to undertake such a task than try guessing. Think about a typical month, how often do you make purchases with cash to you by a lot say every morning on your way to the office? That can add up to over $120 a month about the cash withdrawals from ATMs. Do you remember were the cash has gone?

Separate your purchases into categories. This makes it easier to remember when you might be spending too much. There are many programs nowadays that can help you track your spending habits. One of the amazing benefits of using these types of programs is that you can continually keep track of your spending habits. But you don’t necessarily need a computer to keep track of your spending habits. A calculator, a piece of paper and a pencil will work just fine.

Just about any newspaper, magazine or search on the Internet and you will quickly see America’s obsession with wealth the 10 richest people in the country. Professional athletes and financial executives seem to get all the press don’t they? Often these media outlets will go as far as ranking these people in categories of the richest. Our society defines wealth into big paychecks has nothing to do with a solid family and wonderful children. Many of these rich executives are too busy with their career to have friendships talk with their community get involved with their neighbors.

Can you recall, some of the best moments in your life. I’d be willing to bet these moments don’t include purchases you’ve made because the most valuable things in life can’t be bought with money. We’ve all heard the saying. Money can’t buy happiness, but it is quite tempting to think if you had twice as much money. You’d be happier because you could do the things you want to do drive the car you want to drive. However, that is just not the case. However a great deal of research exists and suggests that there is no relationship between money and happiness.

Health is like wealth. Its absence can be miserable, and having it does not guarantee happiness. Despite today’s modern day conveniences such as cell phones, DVDs and cheap air travel. That is designed to make our lives more enjoyable and easier. We aren’t any happier than we were 50 years ago. Actually, overall happiness of Americans has dropped considerably over the last few generations even though average incomes have more than doubled during that time.

It’s hard to believe, but some people save too much. Even those saving for an important goal, can become consumed by their saving habits. Some people pursuing higher paying jobs and cutting corners in order to retire early. Sometimes make too many personal sacrifices, while chasing after there’d dreams. Others can be consumed by their work and don’t even notice why their family or friends feel neglected. Another problem associated with the obsession of wealth, is that tomorrow may not come even if everything goes perfectly well you know how to be happy when it’s time to retire. More importantly, who will be around to enjoy the fruits of your labor with you? These are one of the many costs of an intense career and time spent away from friends and family.

Then there is the other extreme ones who live only for today. Shop till you drop why save. I might not be here next week. The danger of these personalities is most often tomorrow does come, and most people don’t want to spend every day of their life working for tomorrow and Islamic it necessary for you to work well into your retirement and if for some reason. You’re not physically able. You will live a much less enjoyable, and in some cases, a tragic life. The difference between someone with savings or access to credit and a homeless person can be a very thin line.

Saving money is a lot like eating. If you don’t eat enough, you’ll waste away. If you eat too much, and a lot goes to waste. Or you become overweight, just the right amount afford you a healthy balance in a peaceful existence, money needs to be treated with respect. It’s simply a means to an end, a resource that shouldn’t be wasted.

We are all different. We all have different goals, and all of our situations are unique, but we all have one thing in common with need to save money to accomplish these goals. Don’t wait to start saving until the moment. You need to accomplish your goals