Are you trying to keep up with the Jones's, meaning living beyond your financial means? 
 

This month, we will focus on the importance of living within your financial means.  It is not wise to go into debt, or stay in debt trying to keep up with affluent friends, neighbors, co-workers or family members.  If you are going into debt or are already in debt, it is time to evaluate your priorities.

 

Evaluating your priorities has to deal with evaluating what you spend money on.  Ask yourself questions like, am I spending my money on what I "want" or what I "need?"  If most of your money goes towards what you "want" and you struggle meeting your needs, you have to do better deciding on what purchases are priority.  Below are some helpful tips to help you learn how to evaluate your priorities:

 

1.  Establish a budget that will help you track what you spend money on, in effort to determine how to Decrease your expenses.  You cannot always attend all of the happenings/events.  Sometimes, you have to be able to say, No, not this time, I can't go.  Christmas is near, don't go all out on buying Christmas gifts, if you cannot afford to.  Everybody has birthdays every year, either plan ahead when you can, but know that there will be sometimes when you can't show up to everyone's birthday party or special event.  All of these extra expenses can become expensive, decreases the amount that you have to pay your priorities, and if they are not added into your monthly budget plan, you will find out why you don't have any money left over at the end of the month for your own needs.

2. Find ways to Increase Your Income.  Get a part-time job or turn a hobby (your passion) into an income-based business.  Entrepreneurship is on the rise.  Ask yourself these questions and answer them honestly: What are you passionate about?  How can you transform what you are passionate about into income earnings?  Is it time to leave that low paying job to pursue a career that pays you what you are really worth?

​

3. Pay Down Debt.  Most, say to start with the largest bill or the bill with the highest interest rate. It does make sense to pay off the bill with the highest interest rate, so that you are paying back less money over time. However, often times starting with highest, makes the end goal seem less attainable, if it is the highest bill.  So, I say start with the most attainable goal, usually the lowest bill.  Pay that bill off in either 4, 3 or two installments.  The more reachable a goal is, the more likely you are to achieve that goal.  
 

4. Do Not Live Off of Credit.  Although, this seems like a convenient way to live, you will eventually have to pay that money back, with interest if you do not pay the balance in full.   If you are a student and think that student loan refund checks are free money, you are sadly mistaken and will be in for a rude awakening when you have to pay the student loan debt back. You will see that although, you received the refund check money up front, it will be due with interest when you finish school and have to repay the loans.  The credit card purchase might make it easier for you to acquire what you want right now, however, overtime, you will have paid double for the purchase in the end, if you do not pay the balance in full.

5. If it is possible Consolidate Debt into one affordable monthly payment through a reputable debt consolidation company or ask your bank.  Keep in mind to review the interest rate, many of these companies have high interest rates, but affordable low monthly payments.  Just because the monthly payments are low, doesn't mean that it is a better deal, especially if you will be paying more money back over the length of the consolidation loan.  Evaluate how much total funds you will be paying back at the end of your loan, before agreeing to consolidation.

​

6. Maintain a Lifestyle Conducive to Your Earnings.   Create a budget and stick to it. 

​

Evaluating your priorities, in terms of how to spend your money is important to your financial well-being.  We have to consider priorities like: housing expenses (rent, mortgage, utilities, maintenance), child care expenses, if applicable (school, clothing), transportation expenses (gas, inspection, maintenance, bus fare), groceries (food and toiletries), medical expenses, before we consider our personal expenses (credit cards, cable, cell phone, internet, clothing, school, church, entertainment).  Although, we may feel that school and entertainment are expenses that should be prioritized, if we cannot realistically afford those things, we should consider re-prioritizing our priorities.  The best way to evaluate your priority, is by determining what are the things that you cannot live without.  Because, you need a place to call home, you have to know that rent or mortgage (whichever is applicable to you) should be a priority. Our children are also our priority, if he/she is a minor child in our care and cannot yet work to earn a living for him/herself. 

 

Because, we have to get to and from work to make a living, transportation expenses should also be a priority, even if it is public transportation.  Because we have to eat and feed our children to stay healthy, groceries should also be a priority.   When we establish our priorities, we know where our money should go first. When we do not prioritize, we find ourselves spending more in the area of personal expenses, especially on dining out and entertainment.  When we work hard, we feel that if we work hard, we should also play hard and that we should "treat" ourselves.  But, playing hard comes at an expense.   As you may know when you get into debt from playing hard too long, you can dig yourself deeper into more and more debt that makes it difficult to get out of.  Some people will have a problem with me stating this, but if you cannot afford to pay your priorities first, you should wait until you are in a better financial position to consider making your personal expenses a priority.  In regards, to the church, you give what you can, when you can.  Don’t go broke trying to meet the church needs, without meeting your own household needs first.  God will help you meet your needs,He knows your heart and gives us wisdom to not go into debt giving what we cannot afford to.  Not many will agree or believe that, but I do.   The time that you devote to volunteering at the church is also a form of giving; its not just monetary.  If you can afford your personal expenses without sacrificing your household priorities, then it is okay to indulge, just do not overindulge.

​

Do not feel guilty about prioritizing your priorities, people will just have to understand if you cannot always make every party, every outing, every vacation or every celebratory event.  We have to learn how to say no, when we really cannot afford to do things and not feel guilty about not being able to do it.  Creating a budget will help to determine how much money you have and what you can afford to do (extra).  Your bills come first and then everything else comes thereafter.  Evaluating your priorities is critical to your financial success.  When you are in a better financial position, then you can do more, but until then, focus on getting a better handle of your finances and how to manage your money.

​

Below is a Bank of America video to help you learn how to create a budget and stick to it and be on your way to prioritizing.

​

​

                                                     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                         

 

                                                                                                                                                                                                                                                By Jason Torrents

  

​

​