I was listening to Dave Ramsey's radio show the other day and he said I a statement that was made my ears perk up a bit:
Are you sloppy and getting away with it?
I think a lot of people are sloppy with their finances. I know I can get sloppy from time to time and then I need to tighten up the belt so I am no longer sloppy.
You might be sloppy if:
1) You are carrying a credit card balance
2) You have car loans outstanding that are more than 1/2 of your annual take home pay.
3) Your mortgage or rent is more than than 30% of your income.
4) You are not budgeting
5) You don't have an adequate emergency fund
6) You are not saving for retirement
7) You need to take that fancy vacation each year
8) You have a lot of toys but they are not paid in full
Are you getting away with it? You may be getting away for it for a few years or you maybe headed down a slippery slop.
If you or your spouse lost your job, would you be able to survive financially? Will you be eating steak or Alpo when you retire? Are you eating ramen noodles while driving a brand new car? Did you do an adjustable mortgage because the 30 year fixed rate was too expensive for your monthly income.
How about this-starting paying off those credit cards aggressive, driving your cars for 10 years, saving for an emergency and retirement it can be done. It takes a little effort, planning and the ability to say NO.