Banking Law

Twelve Personal Finance Mistakes - Set Limits

By Eugene S. Melchionne, Connecticut Consumer Attorne

Part of every plan is a budget.  Part of every budget is limits in spending.  If you set limits in the budget, you can reach your goals.  If you don’t set limits, soon spending is out of control and soon you are on the endles treadmill of trying to pay off that credit card debt using the monthly minimums.

Don’t fall into the trap of buying an unplanned purchase or non-essential item on credit convincing yourself that you will just pay the bill when it comes in.  You know you won’t.  Why?  Because, you haven’t budgeted that purchase into the spending plan and there is no room for extras.  If the spending isn’t limited, the credit card balances continue to grow.  They may reach the level where they are completely controlling the budget instead of the other way around.  The next step is loss of assets or property or bankruptcy.

If you set limits on categories of spending and set allowances for each family member, you will reach your goal of staying on your plan.

Full post as published by Debt Law Network on May 30, 2009 (boomark / email).