How often do hear someone say they need to make more money in order to pay their bills?  How do people get into a situation where they don’t have enough money to pay for recurring expenses?  Is it because they don’t earn enough money?  Or is because they spend more money than they earn?

The real question is - are you managing the money you currently earn properly?  There a few situations that some us encounter that cause financial hardships such as unexpected medical expenses, car repairs, home repairs or maybe a job layoff.  But for the most part, most of us simply live beyond our means.  We easily take on debt when we have no reasonable means to repay the debt.

Often we see something we want and we have no cash.  We justify in our minds that we can juggle something, find a way to cut back somewhere.  But before we figure out what we are going to juggle, or where we are going to cut back, we make a new commitment for more debt.  Or we have a legitimate emergency and we have no cash.  So we are FORCED to assume more debt.  This process continues until we have reached the point where we owe more than we could ever pay back.  The next step – bankruptcy!

It doesn’t have to come to such drastic ending.  The question is are you spending more than you should for the basics such as food, shelter, clothing and transportation.  If you had to ‘stretch your budget’ in order to buy that great house, you have placed yourself at financial risk.

Are you taking on more debt that you can expect to repay?  If your answer is that you have no choice when an emergency arises, you are still not managing your income properly!  Your plan MUST have some savings for just such purposes.  Then you will say – but I don’t make enough to save anything.  If that is the case, then your spending may be out of control or you are paying too much for the ‘basics of life', i.e. living beyond your means.

- Joe Freeman