Your Finances
Your Finances By Terry Rigg
Which category do you fall in?
I have determined that financially, people fall into one of
three categories.
1. Family 1 has all the money they need for necessities and more
and manage it very well.
2. Family 2 has all the money they need for necessities and more
but live payday to payday with ever increasing debt.
3. Family 3 don't have enough money for necessities.
The funny thing about the three families above is that they
could have exactly the same income and family size. This is not
to say that special circumstances has nothing to do with it, but
on the average most people live above their means.
Family 1 has established a workable budget. They don't pay more
than they can afford for housing, transportation, utilities,
etc. They also have money set aside for long and short term
savings. This short term savings provides two things. First, it
makes money available when the car breaks down, you need a new
washer or any number of unexpected expenses that crop up.
Second, it prevents the need to use credit cards for these
items. The savings here could be hundreds of dollars. Family 1
planned.
Family 2 is still struggling to establish a budget. In many
cases their house payments or rent is much more than they can
afford. They don't take the time to evaluate the money that
could be saved with little effort. Usually there is no short
term savings, let alone short term. They use credit cards as if
they were cash and pay hundreds of dollars in unnessary finance
charges and penalities. These people find themselves with
financial problems that often leads to bankruptcy. Family 2
either didn't plan or may not know how the handle their finances.
Family 3 has given up on a budget. No matter what they do there
isn't enough money to pay for housing and other necessities.
They struggle to put food on the table. Most don't qualify for
credit cards, which is a good thing. In some cases this
situation is self inflicted and some are due to circumstances.
What is the answer to these problems?
Family 1 - Leave these people alone unless you plan to ask their
advice.
Family 2 - These are the people that need to seek help and stand
a chance of becoming a family 1 family. The possible solutions
include a debt management company like Consumer Credit
Counseling Service. They need to establish a budget and stick to
it. If their housing and other expenses are too high, then they
need to cut back, even if they have to move. They also need to
cut up the credit cards and think about consolidating. Depending
on how far they are in debt, this could take years.
Family 3 - While their struggle seems useless, there are things
that can be done. First, they need to see to it that everything
is being done to keep expenses down. The electric bill is a good
example. There is federally subsidized housing that only charges
a small fee based on your income. Make sure that they are
receiving all federal and state benefits that they are entitled.
If they are able, they should seek job training or some other
means to make their life a little better.
Which family are you? No matter whether your are family 1, 2 or
3, there is hope. The primary thing that must be done is to
educate everyone that learning to managing their finances is
absolutely for their peace of mind. With the vast amount of
information on the internet providing help, this is possible.
If you are a family 2 or 3 family, "The Complete Budget and Bill
Organizer" http://www.homemoneyhelp.com/BBOonline.html can help.