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If you are just starting out in
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 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 down payment on house, but you still need furniture. It's time to break out credit cards. You don't realize just how much furniture, curtains, pictures, rugs, etc. will cost. Now your credit cards are reaching their limit. Then 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 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.
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.
