Nobody likes the word budget as it instantly says for many - restriction. But lets face it, we have monthly expenses that have to get paid or we won't have a car, home or electricity. So lay out what those expenses are and be honest in facing them. When you discover you have extra money left over, determine how you want to spend it - do you have long term goals or do you just want to live paycheck to paycheck?
2. NO CASH RESERVE. Emergencies happen. Some financial experts say we should always carry at least $500 in our savings or checking account, just in case. We know those little things come up, its just a matter of when, so why pretend you can pay later when you an save now?
3.TOO MUCH CREDIT CARD DEBT. Having a credit card is almost a must in today’s society. But that doesn’t mean you need to use up every little bit of credit you have. Not only is it bad for your credit score, but interest rates are usually high and once you get behind the eight ball with your credit cards, its hard to recover.
4. NON-CONSTRUCTIVE USE OF WINDFALLS. Maybe your great uncle leaves you money or you get a tax refund – going on a spending spree will only leave you just where you are – no better off financially. Now is the time to find ways to catch up, save and prepare for a new beginning in using your money wisely.
5. IMPULSE BUYING. People with wealth do not say, how can I spend this money, they ask themselves how can I make more with it. If you find every dollar you have burning a hole in your pocket, ask yourself how long your impulse buy satisfies you compared to how long having a nice savings account would. To prevent being tempted to spend, don’t kill time at department stores and when you are shopping, use a list so that you don’t purchase items you never intended on buying.
6. CAN'T WAIT ATTITUDE. We all want the American dream, the great car, house, and clothes – but often we don’t want to save up and wait until we have the right job with the right pay to match it. We imagine ‘some day’ we will be making more money and then we can worry about the payments then. Later never comes as we continue our spending habits and build debt. Practicing patience and constraint will leave you ahead of the race in the end. As with the tortoise and the hare, you may take the slow approach, but you will eventually end up ahead.
