Yahoo Finance had the article, 8 Questions for the Constantly Broke, and I thought they were worth rehashing. Here’s their questions and my take on them:
1. Do I know where my money is going?
I do believe that the first step of getting finances under control is to keep up with what you are spending your money on. If you don’t know what you are spending on, how can you cut the fat?
2. Am I focusing too much on the month, instead of the year?
The point of this question in the article was to suggest keeping up with one-time annual expenses as well as normal monthly ones. That’s a great idea. We started our car and home maintenance fund after being “surprised” by our homeowner’s insurance the year after we bought our house. We haven’t ignored annual expenses since then.
3. Do I do something everyday that wastes money?
Daily habits like soda, lunches out, beer, smoking, etc can all kill a budget. My hubby cut back on soda when he realized how much money and calories were being wasted. I started saving a ton of money for us by starting to bring my lunch to work this year. I’m so proud that I’ve only eaten out three times for lunch in 2010.
4. Do I know my own weakness?
For us, this falls into the same category as daily habits. My weakness was eating out and I still have a slight addiction to Shirt Woot. My husband’s weakness is hobbies…we started fun money accounts so we could see exactly how much hobby spending was costing. Now he balances his hobbies with a set amount of money so our monthly budget isn’t messed up.
5. Am I saving too much?
The point of the article was that if you have high interest debt, you shouldn’t be saving more than makes sense – receive the maximum company matching on your 401k, but funnel the rest towards the debt. I completely agree since high interest debt sucks money out of your wallet faster than a vacuum cleaner.
6. Is my relationship hurting my bank account?
I know that love isn’t controllable, but I do think you can choose some habits to be attracted to. My husband and I both agree that part of our attraction was the fact we had similar values…one of those is fiscal responsibility. We just wouldn’t be as close if we didn’t hold the same goal to save and have a comfortable early retirement.
7. Are the big items dragging me down?
The big expenses really do hurt the most. Even if you cut as many small expenses as possible, that probably wouldn’t come close to how much you spend on a mortgage, car, health, debt, and grocery payments. Our largest budget cut was our food bill this year. Eating at home more often is actually saving us more than $2400 this year alone since we successfully cut $200 off our monthly food budget.
8. Am I wasting money by carrying debt?
As I mentioned above, debt eats money. The less debt you have, the more money you’ll have for things you choose in life.
In short, this article seemed spot on to me. What do you think? Would you add anything to this list of questions?