What Does It Cost You When You Don't Have a Handle on Your Money?

Wouldn’t it be nice if we had Warren Buffett’s wealth?

You could easily spend over $100k every day
and not even think twice about it.

I am sure that Buffet controls his spending
and has good accounting principles in place, anyways.
That is why he is one of the richest persons in the world.

But not everyone has money under control.

Recently, in the Michael Jackson wrongful death
case against AEG, it was revealed by a forensic
accountant, William Ackerman, that Michael was
spending several million dollars more than what
he was bringing in.

You may be thinking that is ok. MJ was rich.

However, it was also revealed that he died
with 500 million in debt.

Ackerman told the court, “He was in a very
precarious financial condition; He dug himself
in a pretty good hole.”

Overspending happens to the best of us.

Even the “King of Pop”

Take any particular day, week, or month.
If you ask most of the population how much
money they spent during any given period,
they could not give you an answer.  They can
list a few expenses like the house and car
payment or what the dinner cost the night
before at the Oliver Garden.  It is only after
taking a look at their bank and credit card
statements at the end of the month that
reality sets in.

Money is one of the most important things
necessary to survive in this world besides
having a heart-beat, oxygen, water, and food.

Nevertheless, we are so loose with it.   Here is
what is costing people who don’t have a handle
on their money:

1. A life full of stress, worry, and anxiety.
2. Continuously living paycheck to paycheck
3. Being in Debt until death do you part.
4. Working well into your Golden years.
5. Fighting with loved ones over it.

So how does someone go about taking
control of their money and getting off
the merry go round?

The answer: GET ORGANIZED

What it really boils down to is creating
a Spending Plan (aka budget) as
part of your routine.

It is actually easier than most people think.

At first it might be awkward, but all it
takes is doing it consistently, just like
you would brush your teeth.

But wait a minute, we all resist change…

Here’s why we are resisting:

“Budgeting is too complicated”
“It takes too much time”
“I don’t want to put limits on my life.”
“I will keep track of it in my head”

But are these statements really true?

How do I know them because I said them, myself.

“Budgeting is too complicated”
– If some knows second grade math,
they certainly can create a Spending Plan.
I fought this for years and then I finally
sat down one day and created a plan
and wrote down what I was spending
money on.  It sure cleared the fog in my head.

“It takes too much time”
-5 minutes a day is all it takes and one
hour at the beginning of each month.
I overcame this objection by adding up
my receipts and tracking my spending
while I watch TV.  My favorite show
right now is America’s Got Talent maybe
since Heidi Klum is on the show.

“I don’t want to put limits on my life”
– This is the easiest of the excuses to
overcome because if I continued to spend
freely I would be limited for the rest of my life.

Think about it for a moment?

You are actually limiting your life
by not having a spending plan in place.
The masses would argue this point.
You hear it in the media and from
advertisers that we are entitled to
have anything we want.  You have heard
the old statement, “Life is too short.”

“I will keep track of it in my head”
– This is the best one.  With so many
things going on these days, who can
tally everything up in their head and
then compare it to their income for the
month.  Why complicate things, keep
life simple by getting it down on paper.
I found that the rewards of having a
Spending Plan in place outweigh
any time spent creating and doing it.

Here are the benefits of having a
plan in place and controlling your spending:

1.) You control of money, instead of money controlling you.
2.) Having peace of mind that you are in control.
3.) Eliminates wasteful spending on things you don’t need.
4.) Better relationships with fewer arguments about money.
5.) Being prepared for unforeseen circumstances.
6.) Putting that wasteful spending toward debt.
7.) Setting some aside to have money work for you by investing it.

If people would treat Mistake #4 like they
are depriving themselves of oxygen, then maybe
they would do something about it.  And once they
do something about it, they will breathe a whole
lot easier knowing their finances are under control.

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