It has often been said that one cannot tell where they are going unless they know where they have been. Unfortunately, over the last few years we’ve been to some devastating places. We’ve seen unemployment rise just over 10%, foreclosures numbered in the tens of thousands each week, and credit card interest rates reach unprecedented heights. These travels have shown us just how frail our economy can be. In order to protect ourselves it’s important that we have a well structured personal economy which is derived from developing a spending plan. An individual must have a clear picture of his or her current situation before a determination can be made for a reasonable course of action. This is accomplished by conducting an Initial Spending Assessment, which yields an overview of the costs associated with the various aspects of our lives.
Because each of our finances are different, it may be difficult to say that an individual’s specific spending is inappropriate in any one category; however, I do have recommendations as to what an average consumer should be committing to generalized categories. This aspect of the spending plan is important as it may immediately bring an attention to a category within the budget commanding too much income. With this information, you may begin to make immediate changes so you can apply earnings to other areas of the plan that require them.
The presentation below will guide you through developing a spending plan. I’ve also included several videos to elaborate on specific points. If you would be interested in receiving a personalized review of your finances, please call 800-897-2200 to speak with one of Cambridge’s certified credit counselors.