10 reasons to take control of your spending

By Steve Bucci • Bankrate.com

http://www.bankrate.com/nltrack/news/debt/20041217a1.asp


Dear Readers,

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 afterwards 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 can afford.

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. Visit CCCS for additional debt advice or click here to ask a debt question.