Each week I get questions
from people who need debt advice. Taking control of spending
is absolutely necessary if you want to avoid problem debt.
So here's my list of the top 10 debt-causing attitudes.
You might want to take control of your spending
in 2005 if:
10. You never met a credit card you didn't like. Debt
is a four-letter word and is what you get when you use credit
cards to extend your income. Stop charging now and make a commitment
to begin living on your current income.
9. You are impulsive by nature and think
that using your credit card makes you appear more attractive.
I actually knew a lady who bought one slipper because it was
on sale. If you have things you a.) Didn't know you bought;
b.) Haven't ever used; and/or c.) Hid afterward because you
knew you shouldn't have purchased them in the first place,
you need to curb those impulse buys and you will be surprised
how much money you will save.
8. Your retirement plan is to work until
you die. Many people currently retired did so because
they were too ill to work, became disabled or as a result
of other unplanned life events. Begin saving for retirement
now. You will be old before you know it and may want to retire
to a lifestyle of your choosing rather than the only one you
7. You run out of money before you run out
of week. If you find yourself taking a payday loan to
purchase groceries or to pay your mortgage late again, it's
time to take action. Staying within your income allows you
the freedom to stop worrying about bills and begin to plan
for and realize a great financial future.
6. You don't know how much you owe or don't
care. Get out all those statements and add up the damage.
It might be just the shock you need to take control and stop
overspending. Once you know the total, come up with a plan
to pay it off as quickly as possible.
5. You buy things you didn't know existed
before you saw them on television but now desperately need.
Without some type of spending
plan, you are more likely to let others decide for you
what you buy. Do you really want advertisers making buying
decisions for you? Come up with short and long term financial
goals and then incorporate them into a simple spending plan.
4. You never worry about money because your
partner does enough for you both. Take a walk down to
the local family court and you will see what can happen to
otherwise happy couples when spending is out of control. A
spending plan is not a recipe for a happy marriage or partnership,
but it certainly gives you one less thing about which to argue,
which also happens to be the largest cause of divorce.
3. You have never saved a penny in your life.
It is difficult to save money for emergencies when we are
spending with abandon. A savings
cushion of three to six months' of living expenses is
an important financial tool. Also, don't forget to save for
big-ticket items and periodic expenses such as holidays, home
repairs and summer vacations.
2. You don't know if you will have a job
tomorrow. Retiring from a company after working there
for 30 years is less and less likely. The reality is that
a person can expect to change jobs and even careers four or
five times in his/her working life. Gaps in employment are
virtually assured. Gaps in bills to pay are not.
1. You know more about erectile dysfunction
than money management. The popular media does not sell
money management like it does other less important products.
Heck if you can take control of a receding hairline and ED,
you can take control of your money!! Start with a spending
plan, get expenses in line with income and pay yourself first.
Good luck and Happy New Year!
The Debt Adviser, Steve Bucci, is the president
of Consumer Credit Counseling Service of Southern New England.
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great financial strategies for 2005