Wednesday, April 20, 2011

Spending before Bills

I know several people that are spenders before bill payers, I’m sure you know or are one yourself. These people are very convincing of themselves and of those around them that the objects they buy are necessary. The thinking goes: “I have money, I have money to spend”. Then next thing you know there is no money for bills.

Spending before paying bills is very dangerous and can cause major financial issues to add up fast. All that is needed is a change in thinking and making sure bills are paid FIRST, well after paying yourself. This doesn’t mean paying yourself and buying something this means the automatic savings you have set up, then bills, then things.

You can do a couple things to help you go from a spender first to a spend last, if there is money left person:

1. Mark on a calendar due dates or set alarms on your cell phone for a few days before the bills are do.
2. Set up everything you are comfortable with being automatic (like the cable bill, car payment, loan payment), but make sure the money is always there when it is supposed to be or make sure to call the company and ask for an extension or reduction in payment.
3. Open your mail. You don’t know what or who you owe if you don’t open your mail.
4. Learn the difference between wants and needs. Check out the post where I talked about this.
5. Learn to budget and try your best to stick to it.

Finance takes a lot of discipline, which is why most of us struggle with them. Becoming financially independent takes time, many times years. But I have heard that once your money is truly yours, the feeling is amazing.

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