In My Experience - In what order do you spend your money?

If I asked 50 people on the street that question, my suspicion is that most of them would not be able to answer.

Let me suggest the order to you. After looking at it see if you fit the pattern.

1. Spending - expenditures to support our current lifestyles
   
2. Debt Payments - House, Car, Credit Cards, the Harley, etc.
3. Taxes - The Good 'ole USA
   
4. Saving - Emergency Fund, Retirement Savings, College
   
5. Giving - Helping others and organizations

Because our culture places so much emphasis on our lifestyle, most of us run out of money after Step # 3. We are told that "we deserve a break today" so we live it up. We buy faster, thinner, cooler, and newer stuff, because we are conditioned to do so. We have very little will power over our purchases.

As a culture, we spend more than we make. We do it through the use of consumer credit, primarily credit cards. The average American family had 5.6 credit cards at the end of 2008, with an average balance of just over $10,000. The need to use credit cards is driven in large part by our lifestyle decisions. We make poor choices regarding lifestyle and then when a crisis comes, we lose our jobs, or a medical need arises, we feel trapped into using our credit cards. Most Americans, if asked, would say that it is impossible to live in America without using consumer debt.

I believe that it is possible to live without using credit cards. In most cases it can be done by reordering our spending patterns.

Let me propose to you a new order:

1. Giving - Helping others and organizations
2. Saving - Emergency Fund, Retirement Savings
3. Taxes - The Good 'ole USA
4. Debt Payments - House, Car, Credit Cards, the Harley etc.
5. Spending - expenditures to support our adjusted lifestyle

If we as a culture would adopt this pattern of using money, our lifestyle would never get out of control. If we spent our resources on purpose and recognized the benefits of doing it, we would not spend more than we make by using credit cards.

The Solution:

Instead of letting culture control our money, why don't we begin to control it?

The Process:

We did not develop these patterns over night, and getting out of them will take some time. There are many methods and tools  than can guide us, but in the end, it will take hard work and determination.

There are no quick fixes but there is hope!

If you would like to explore how you can get control of your money, call us! We would be delighted to help!