In debt? Why not head out and get a loan for the trendiest, most expensive car you can find. Never mind the interest rate. As long as you can get approved! And don’t worry about getting the car insured either, because the chance you’ll get into a wreck is pretty slim. And last but not least, since the buying experience was stressful, after you pick up your new ride, you should treat yourself to a fancy dinner at the nicest restaurant in the city.
Seems a bit overboard, right? Of course it is. Even if you’re debt-free, we’re not going to recommend you blow all your cash on an expensive car or get a high interest rate auto loan, not to mention go without car insurance (on the contrary– the responsible thing to do is to compare auto insurance quotes to find some extra savings)!
Sometimes, however, it’s hard to avoid splurging on material things that catch our eye. Those tricky advertisers have tons of smooth one-liners up their sleeve and they know exactly how to get us silly little consumers drooling over their newest product. Plus, we work hard, right? We deserve to have a little fun with all that money we earn, right?
Yes, it’s important to have fun with our money, but when is our spending just right and when is it too much?
I know so many people who want to change their financial situation. They’ll say they’re in a financial rut and they can’t break free. They’re drowning in debt or can’t make ends meet. Then they’ll go out and spend like I suggested in the first paragraph and end up right back at square one. Or if they don’t have a frivolous spending problem, they just don’t always make the best decisions with their money.
I used to follow a similar pattern. I would spend and spend and not even know how much money I had in the bank. Then I would tell myself I would not spend any more money until I paid off my debt. Of course, that only worked until those crafty advertisers started whispering sweet nothings in my ear about a great sale going on at my favorite store. Then, the spending cycle would start all over again.
However, when you fall into a vicious cycle of binging on spending and then claiming the next day that you won’t shop for a year, you’re only setting yourself up for the worst. This solution is imbalanced which is why it never works.
The only way to defeat the powerful spending cycle is to find your own financial balance.
Out of the hundreds of millions of people in the country, not one of us has the same financial situation. (That’s why it’s called personal finance!) I can write about tips on how to save money or be frugal all day long, but none of them will serve their purpose until you start to decide what works best for you.
While a fancy dinner on a Friday night may fall into some people’s budget just perfectly, it could easily throw another person’s budget completely out of whack.
Until I found my financial balance, my money situation was out of control. I was trying to meet the needs of my friends and family while trying to fit in with the rest of my peers. I literally had no idea how much money I was spending on social outings, insurance, clothing, and food each month. Two simple solutions helped bring my finances back in balance: tracking my spending and learning to say “No” when I knew I couldn’t afford something. Finding my balance immediately set me on the right path to becoming debt-free. While these two things brought me financial stability, you might need completely different solutions to find your perfect balance.
Try asking yourself these questions to help find your balance:
- Is your budget realistic for you and/or your family?
- When you spend, do you know that it will cause you budgeting problems?
- If so, what are your biggest spending problem areas?
- What causes you to spend in these areas?
- How can you avoid these budget pitfalls in the future?
- Overall, what are your biggest financial goals right now? Saving, paying off debt, donating more, etc? (Remember that everyone’s financial goals are personal and don’t have to be the same goals as your best friend or your significant other.)
- Which financial areas are preventing you from reaching your goals?
- How can I reach my goals, but still enjoy life in the process?
Everyone’s perfect balance is different than the next person. Next time you feel that you don’t have control of your finances, try to step back and take a look at the big picture. Ask yourself the questions above to help you find your financial balance and you could be well on your way to meeting all of your financial goals. Are you leading a balanced financial life? What strategies do you use to maintain your balance?