Do You Control Your Spending Or Does Your Spending Control You?
Imbalances between what we want and what we can afford tend to happen gradually as we get into unsustainable spend-and-borrow cycles. At the same time it is easy to lose sight of life’s bigger goals as we focus on the day-to-day task of making ends meet. It doesn’t have to be this way. The first place to start to get your spending, earning and borrowing to where you want them to be, is to take an honest look at your current situation and your goals.
Is Your Spending Under Control?
The first step to the future is to know where you stand right now.
Take the ‘Wise Spending’ test.
o I have a home mortgage
o I have a car loan or personal lease
o I have a personal line of credit
o I have more than one personal credit card
o I currently have a combined outstanding balance of more than US3,000 on my credit card
o I save less than 10 percent of my income each year
o I am too young to have a retirement plan
o I want to have a boat, second home or extended trip in the near future
o I have one or more children who will be attending college or university
o I am still paying off a student loan
o I am planning a home renovation in the next two years.
If you ticked six or more of these, then your spending may be controlling you, rather than the other way around. You may also be at risk of not being able to afford some of the big demands in your future including your recreational pursuits, hobbies, your child’s education and your retirement.