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The reason you need to do this is because you don't want your financial situation to ultimately end in one that leaves your finances in complete ruin. If you sit down and find your expenses are routinely exceeding your income, this is going to eventually lead to big-time debt. Don't let it get this far.
Self-evaluating one's financial situation can be tough because expenses are often hard for people to cut. After all, who likes to give up the things they enjoy or have become accustomed to in their daily routines?
A good, hard look
Examine utility expenses
Many utility expenses, such as telephone, water electricity, gas and heat can be scaled back on if used sparingly and not wasteful. But there are many other areas that can be reviewed again and then honestly considered if these are a need or a want. If it’s the latter, it can probably be cut.
Personal expenses
Personal expenses are also typically easy to reduce when necessary. Trips to the mall for new clothes can be transformed to trips to thrift stores, consignment shops or garage sales. If buying new is an absolute, there are always clearance racks. Often you can find some pretty good stuff at bargain prices.
Wants vs. needs
Society spends a lot of money every day on things that are luxuries. Think about it. Today people carry all kinds of mobile devices, subscribe to pay television packages, eat out at restaurants or buy convenience foods, spend good amounts of money on entertainment and even things such as the daily Starbucks stop for a cup of java.
Are all of these things absolute necessities? Arguably a smartphone can be considered a necessity, but what about all the bells and whistles that often come with them? These all cost money. Do you really need that large data plan? Or do you need a data plan at all? If you don’t need Internet access for work or school, can you get by with a simple cell phone? For instance, most people pay for Internet service at their homes and, if this is affordable that's all well and good, but if struggling financially, why pay twice for the same kind of service to use on two different electronic devices? Scratch the data plan and stick to home Wi-Fi.
Many television packages are expensive and, if you look at options, there is typically a more affordable package, even if you have to give up some of the channels you enjoy. Or cut out pay television altogether and buy the basic monthly package and read books from the library or watch pod-casting online. Or a streaming service, such as Netflix.
These are only a couple of examples of expenses many people in society today consider a necessity, but if you sit down and honestly evaluate your financial situation, it's hard to argue these are true necessities. By cutting them you can get back on financial track. This is often difficult to do because it's hard to give up the things we enjoy.
Society has become accustomed to a different standard of living, much different than our parents and grandparents had. Back then people raised either in the depression or in the subsequent decades understood the value of a dollar and how to save money.
The best way to evaluate your financial situation honestly is to evaluate yourself. Start by creating a budget and list all expenses and sources of income, be truthful to yourself as you go through expenses and divide up necessities vs. luxuries. Afterward go back and look at the necessities and see whether or not these can be scaled back too.
If we reflect and learn how to truly evaluate the difference between needs and wants, it's much easier to do an honest financial evaluation.
Are all of these things absolute necessities? Arguably a smartphone can be considered a necessity, but what about all the bells and whistles that often come with them? These all cost money. Do you really need that large data plan? Or do you need a data plan at all? If you don’t need Internet access for work or school, can you get by with a simple cell phone? For instance, most people pay for Internet service at their homes and, if this is affordable that's all well and good, but if struggling financially, why pay twice for the same kind of service to use on two different electronic devices? Scratch the data plan and stick to home Wi-Fi.
Many television packages are expensive and, if you look at options, there is typically a more affordable package, even if you have to give up some of the channels you enjoy. Or cut out pay television altogether and buy the basic monthly package and read books from the library or watch pod-casting online. Or a streaming service, such as Netflix.
Be honest with yourself
These are only a couple of examples of expenses many people in society today consider a necessity, but if you sit down and honestly evaluate your financial situation, it's hard to argue these are true necessities. By cutting them you can get back on financial track. This is often difficult to do because it's hard to give up the things we enjoy.
Society has become accustomed to a different standard of living, much different than our parents and grandparents had. Back then people raised either in the depression or in the subsequent decades understood the value of a dollar and how to save money.
The best way to evaluate your financial situation honestly is to evaluate yourself. Start by creating a budget and list all expenses and sources of income, be truthful to yourself as you go through expenses and divide up necessities vs. luxuries. Afterward go back and look at the necessities and see whether or not these can be scaled back too.
If we reflect and learn how to truly evaluate the difference between needs and wants, it's much easier to do an honest financial evaluation.
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