Home Loans Help: Credit Tips

The Most Costly Expense of All

By Terry Rigg

Do you think you have a lot of bills? If so, you are probably
right. But have you considered the bill that costs you the
most each month?

On average your housing costs probably run about 30% of your
take home pay. Your other bills which include utilities,
credit cards, etc. also run about 30% of your take home pay.
It probably takes another 30% to run your household and if
you are lucky you can stash the remaining 10% in a savings
account.

What are your percentages? Do you know? That's the problem.
Most people run their budget out of their wallet.

There is that hideous word "Budget". Many people compare
operating their finances with a budget to having a ball and
chain attached to their wallet. They won't be able to get
anything they want for the rest of their lives.

Let's see if the following scenario fits you:

You get paid.
You write out your bills.
You give your spouse some money.
You wait for next payday to get some more money so you can
do the same thing.

You may not realize it but if you are doing this you are
spending a lot more money than you need to.

Most of the people I work with have no idea how much
money they make or how much they owe. While money may be
important to them it is way to much trouble to learn how
to manage it. This is the very reason there were $1.5
million bankruptcies in this country last year.

I can almost guarantee that if you are trying to run your
finances like the scenario above at some point you are going
to run into problems. It simply can't work.

The main reason for this is that you never get a broad picture of
where you are financially. You pay the bills and hope you
have enough money to buy your groceries and put gas in the
car until next payday.

Most people can add and subtract. That's all there is to
a budget. If you aren't willing to take the time then
living paycheck to paycheck will be with you the rest of
your life.

I call this "Financial Complacency" which simply means that
you know you need to manage your money better but aren't
willing to do what's necessary. Here are a few excuses I
hear to justify this:

I don't make enough money.
I owe too much to set up a budget.
I'm not good with numbers.
I just don't have the time to keep up with a budget.
I can't get my spouse to work with me.

Do any of these sound familiar?

Well, that's the problem but what about a solution. The
solution is simple no matter what your financial situation
is.

First, you must find out where you stand now. That could
be as simple as writing down your income and bills and
expenses on a piece of notebook paper. Then subtract your
expenses from your income. Make sure to include your
household expenses (groceries, car gas, etc.) in your
expenses.

Now look at the numbers. Do you have anything left over?
If so what are you going to do with it? That's the next
step. If you don't then you need to consider cutting some
of those expenses.

Now you need to decide what you really want your money to
do for you. Set your goals! This could be saving for your
retirement, buying a home, college for the kids, getting
a new car or any number of things. That's why you have to
decide for yourself. There are just too many variables for
someone else to help you.

My first suggestion is that if you have credit card debt you
look for a way to pay them off and stop using them. Realizing
that goal could make your other goals more likely to succeed.

Now it's time to set up that dreaded budget. Where are you
going to find the time and desire to write everything down
that you spend and all the other stuff that goes along with
keeping a budget? The answer is that you don't have to!

One of the biggest myths about budgeting is that you need
to keep up with it everyday. That's the reason so many people
refuse to try.

It does take a little time to get your budget setup. There
are a lot of things that need to be considered. But once
your finances are down on paper there is no reason to work
on it except on payday. You will find a link to a free budget
like this in the bio of this article.

If you believe that managing your money is to difficult or
just too much trouble consider the alternative. Not managing
your money is probably robbing you of thousands of dollars a
year and could lead to financial disaster.

Terry Rigg is the editor of the Budget Stretcher web site http://www.homemoneyhelp.com and The Free Budget Stretcher Newsletter http://www.homemoneyhelp.com/confirmsubs.html . He offers a free Budget System complete with the forms and worksheets needed to make it work. http://www.homemoneyhelp.com/BBOonline.html

Related Pages

Mortgage Brokers - Shop these top lenders for comparison quotes.

Credit History and Approval - How to get a free credit report - Quick fixes to qualify for a better rate.

Down Payment Leverage - Avoid PMI with a two-loan strategy. How to grow your equity faster.

Online Lenders - Tips on evaluating online lenders and their offerings.

Refinance- Tips on when refinancing is the right decision - How to avoid paying points and other lender fees.

Home Loan Online - Discover the best ways to get the lowest rates - Links for checking current rates.

In The News

	Web Home-Loans-Help.com