I don’t think most people intentionally sabotages their finances. It’s more likely that they spend and not keep track of income and bills. I had a problem when I was in college. I was estimating what I was spending on eating out, but after looking at my credit card bills, I saw I was off by a lot.
Keep a record. Simply put, if you do not follow this step you are setting yourself up for failure. You have to track what you’re spending your money on, whether it’s video games, eating out, bills, or gas money.
There is no way you can fix something unless you know what is wrong. Identifying the problem is the most important step. Guessing is not an option.
Adjust your plan. Life happens and your early attempts at budgeting will be off (mine was). Learn from what worked and what didn’t and adjust accordingly. Budgets only work if they are realistic.
You will have an unexpected emergency. You will eat out sometime. You will hang with friends. That’s fine IF you plan for it. Set aside money each paycheck. Period.
When Expenses Exceed Income
I wrote about reducing your bills to give you some ideas of how you can cut some expenses. It has worked me and has gave us room to save and pay down debt.
If you have a serious time keeping a budget, you may have an addiction.
Trent offers some steps to defeating an addiction to spending. The first out of the twelve steps is:
We admitted we were powerless over spending — that our lives had become unmanageable.
I think that is the first step to fixing a problem: acknowledging its existence. Here are some resources about spending addictions:
- Debtors Anonymous
- 5 ways to stop the urge to shop
- What is spending addiction
- Are you stressed and overspending?
I looked up some personal finance bloggers who have to deal with overwhelming debt and are either out of it or working towards their goals.
- The Road To Financial Armageddon #1: The Earliest Mistakes
- 7 Stupid Financial Mistakes I’ve Made
- Mistakes and Corrections
- How I overcame $35,000 in debt
- My Best and Worst Financial Decisions
- Where My Debt Came From
- How I Got Out Of Debt: Follow The Posts
These are real people who made mistakes and are learning.
I’ve improved with my spending habits, but I am by no means perfect. This blog is a online diary of my journey to a debt free life.
Has anyone dealt with this issue? How did you work through it? If you’re a blogger and have a post about it, please email me and I’ll update my post with your story.
Photo Credit: iChaz