Practicing mostly in the areas of debt settlement and bankruptcy, I often review the bank statements of my clients. What I often find after speaking to a client is that he or she simply doesn't know where the money is going every month. The client simply knows that after they pay the bills there is little or nothing left and are frustrated with the constant strain finances are putting in his or her life.
The bank statement is helpful because I find most people estimate they spend less each month than they actually spend. A bank statement puts hard numbers in front of you that clearly show what you are spending each month. A bank statement may also point out where expenses can be cut to get out of debt or save more money. When I review bank statements for clients, I often find small charges several times a day each day that the client is not factoring in to his or her budget. These charges are often less than $15.00 per transaction, but can really add up over the weeks and months. For example, I often see small charges for fast food, liquor stores, coffee shops, convenience stores and ATM withdraws. It is typical for there to be six or eight of these transactions showing up per week and these transactions add up to quite a bit of money. For example, if we assume that a person swipes his or her debit or credit card six times per week with the average transaction of $8.00, that person would have spent $192.00 by the end of the month. If that person is married it is a good bet that $192.00 can be multiplied by two, for a total of $384.00 in expenditures each month.
My point is that everyone knows that if they are trying to save money that they shouldn't splurge on an expensive vehicle, designer handbag or vacation. However, what many people who are trying to budget their money to either get out of debt or simply to save money they tend to overlook the small purchases as being insignificant. The bottom line is that the little things add up in a big way.
To truly understand where your money is going take out a bank statement and add up the transactions where you stopped for a quick snack at the fast food restaurant, bought a drink and pack of gum at the gas station or bought a 6-pack of beer. Most folks are amazed when they add all of these little purchases up that it is easy to spend a few hundred dollars a month on things that they don't really need.
I am not saying that any person can or should go a whole month without making a small impulse purchase or two....I am just saying that for many of us, these small purchases add up into a decent amount of money. For those trying to get out of debt every extra dollar counts and it is important to be aware of these purchases so that they don't get out of hand and get you off track from your financial goals.
I would love to hear about any tips or tricks that you use to keep your spending in check and your results. Please post these to the comments section. As always, feel free to contact me at 317-575-8222 for an appointment if you feel like you cannot escape from debt and are considering bankruptcy. I would be happy to meet with you at Halcomb Singler and there is no fee for the initial consultation.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
No comments:
Post a Comment