Everyday we are bombarded with dazzling images of luxury items we simply "can't do without" and offers we "simply can't refuse." We've been programmed by our culture to seek out instant gratification. We buy things we can't afford rather than plan and patiently wait until we've saved up enough to buy "it" (whatever it may be). Thus, our money is going out before it comes in.
It's different for all of us - the trigger that causes us to temporarily lose our sense of discretion, which makes us forget all we've learned about managing our finances, puts us, for that one critical moment, "out of our right minds." It may be a car or it may be a time-share. It may be status or companionship or the promise of reclaiming your youth. Whatever your trigger, unless you are aware of it you are a victim to it, and will be time and time again.
Let's play a little psychology game - read through this list slowly and notice what impulsive, emotional reactions you have to some of them: Clothes, Shoes, Jewelry, Cars, Vacations, Christmas Gifts, Pets, Self-Improvement, Home Improvement, Seminars, Charitable Donations, Family, Chocolate, Wine, Beer, Dining Out, Boating, Outdoor Sports, Books and Games.
The truth is that nothing is inherently wrong with any of these things. They're all valuable and, in some cases, essential parts of life - in moderation. That's the key. When we devote an imbalanced portion of our limited resources to any one of these things, we run the risk of putting our savings (and our future) in serious jeopardy.
If you've always lived paycheck to paycheck and you've never really felt like you had extra cash, stop spending money on things that weren't already earmarked for something else. Then you will never wonder "where does it all go?" You must start saying "no" to some purchases.
Analyze your checking account statements. How much money do you typically have left over at the end of the month after paying all your bills? Any? Or are you not even able to pay all of your bills in full the month they're issued? Do you even bother to balance your checking account? If you do, great. If not, you need to start immediately.
To find out where your money is going, start with a simple budget. Careful budgeting can be done easily with the help of a simple to use software application like Budget Forecaster. This, along with responsible spending, is all it takes to help you hold on to your hard earned money, and you will always know exactly where it is going.
