5 Key Personal Finance Problems - Which One Do You Want to Overcome?
Bruce Hokin
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You can take control of your personal finances by applying the lessons listed below.
Problem #1. Spending Without Knowing Your Limits
As in business, you will not last long financially if you spend without regard to your income. Knowing your spending limits is not hard to do. Just find the answers to these 4 easy questions: 
Question #1. What is my take-home income per pay? (that is your total income less taxes)
Question #2. What do I need to spend to live?
Question #3. What is the difference after taking spending from income?
Question #4. Can I save enough for my future from the answer in Question #3?
There are many tools to help you gain answers to these questions. You can find many on the Internet. Helpful Hint: Find one that helps you set your savings targets, checks your ability to meet the targets and then shows your progress towards your goals.
Problem #2. Spending Without Setting Savings Targets
It's OK to spend to the limits of your income but that does not provide you with any buffer for urgent purchases, or protect you from a financial emergency. Urgent purchases could be renewing a broken fridge or stove, calling a plumber to fix a broken pipe or having to spend for major car repairs. Financial emergencies could be temporary loss of income or hospitalization of a family member. How would you survive financially in any of these situations?
You can begin to save today, it's easy. What if you went without your bought lunch each day at work? That saves you $1,000 per year on $5/day. What if you reduced your Starbuck's coffee by 1 each working day? That's another $1,000 per year on $5/day. Just those two amounts alone can mean a holiday for you, the beginnings of a savings plan, or an emergency buffer.
If you set a target of 10% of your take-home pay each payday that would be a good start. If you think creatively, you are sure to come up with ways to achieve this. Think of the peace of mind that would bring.
Problem #3. Spending Without Knowing How to Save
There are many easy ways for you to save money that allow you the freedom to spend when you see something you really want. Some of these are:
Problem #1. Spending Without Knowing Your Limits
As in business, you will not last long financially if you spend without regard to your income. Knowing your spending limits is not hard to do. Just find the answers to these 4 easy questions:
Question #1. What is my take-home income per pay? (that is your total income less taxes)
Question #2. What do I need to spend to live?
Question #3. What is the difference after taking spending from income?
Question #4. Can I save enough for my future from the answer in Question #3?
There are many tools to help you gain answers to these questions. You can find many on the Internet. Helpful Hint: Find one that helps you set your savings targets, checks your ability to meet the targets and then shows your progress towards your goals.
Problem #2. Spending Without Setting Savings Targets
It's OK to spend to the limits of your income but that does not provide you with any buffer for urgent purchases, or protect you from a financial emergency. Urgent purchases could be renewing a broken fridge or stove, calling a plumber to fix a broken pipe or having to spend for major car repairs. Financial emergencies could be temporary loss of income or hospitalization of a family member. How would you survive financially in any of these situations?
You can begin to save today, it's easy. What if you went without your bought lunch each day at work? That saves you $1,000 per year on $5/day. What if you reduced your Starbuck's coffee by 1 each working day? That's another $1,000 per year on $5/day. Just those two amounts alone can mean a holiday for you, the beginnings of a savings plan, or an emergency buffer.
If you set a target of 10% of your take-home pay each payday that would be a good start. If you think creatively, you are sure to come up with ways to achieve this. Think of the peace of mind that would bring.
Problem #3. Spending Without Knowing How to Save
There are many easy ways for you to save money that allow you the freedom to spend when you see something you really want. Some of these are: