I came across this list of Top 10 Causes of Debt and was struck by #3:
3. Poor money management. A monthly spending plan is essential. Without one you have no idea where your money is going. You may be spending hundreds of dollars unnecessarily each month and end up having to charge purchases on which you should have spent that money. Planning is no more difficult than writing down your expenses and income and reconciling the two. You will be surprised at how powerful you’ll feel when you are making thoughtful decisions about where and when to spend your money.
That last sentence is worth repeating: You will be surprised at how powerful you’ll feel when you are making thoughtful decisions about where and when to spend your money.
Before I learned how to really be financially responsible, I felt out of control and helpless. I thought I had no choice but to struggle to pay my monthly expenses. Then I learned about budgeting and making conscious decisions about spending. Even though these seem like basic skills, I simply didn’t have them. Once I learned them, I felt powerful, like the quote says.
These days, if I start to feel a bit overwhelmed by our financial situation, I know it’s because I’ve gotten lazy about tracking our expenses and that I’m not seeing the entire picture anymore. When this happens, I take some time to sit down and review our overall financial picture – expenses, income, debt, investments and overall net worth. It puts things in perspective, and puts me back in control. Now that’s something to be grateful for.