Is Your Money Upside Down?
Upside Down Defined
Your money is defined as upside down if you:
- owe more than you own,
- buried in debt with little to no equity
- live from pay check to pay check, barely
- pay everything with credit cards
- carry a credit card balance
- just pay the monthly minimum on your credit card balances because those balances are too high to pay off
- have an accumulation of “stuff” that becomes old and outdated before it’s even paid off
Got Bad Spending Habits?
Even though we all know that spending more than you earn is bad news it is a very easy to become an over spender. If your money is upside down because of bad spending habits, do not be discouraged, with the right approach overspending is reversible. The right approach is to recognize and admit to yourself that you may have some financial challenges; being in denial just makes it more difficult to turn your bad financial habits into good ones.
Approach slowly and with caution though. Do not overwhelm yourself by going “cold turkey”. With any type of correction it’s always best to ease into it.
Start With The Basics
Why do you do it? Do you even know why you spend money? If you constantly find yourself overspending, determine what triggers it. Do you buy what you need or want? Does spending make you “feel good”? Do television commercials tempt you? Do you order from catalogs because you love to receive packages in the mail? When you are in a shopping mall do you find it hard to resist the temptation to buy something…anything? Does owning more things make you feel more powerful?
Do You Know Where Your Money Goes?
Follow your money. It may sound elementary but the best way to know where your money goes is to analyze your spending habits. Follow the example of those weight loss programs. When people are trying to lose weight with one of those programs they are instructed to track what they eat so they can follow the calories. Take the same approach on following your money, write down every dime you spend. You can then review your spending and make any appropriate adjustments. You may be surprised on what you spend your money on and how fast it gets wasted.