The Importance of Identifying the Cause of the Problem

Regardless of whether you are looking to reduce spending for the purposes of debt reduction, or for saving, the first thing that must be done is to identify where you are spending money unwisely. If you are not ready to be honest about a budget breaker, a vice, or a ‘treat,’ then you are not ready to take full control of your financial (in)stability. This may be hard for some people to be able to see, let alone to admit. Sometimes what is quite obvious to some, is totally unseen by others.

I talked to a few of my friends who are both financial advisors. They both came back to this exact point. Especially for those trying to dig themselves out of a financial hole, if they can


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5 Responses to The Importance of Identifying the Cause of the Problem

  1. Mrs. Frugal says:

    Great article! Taking an honest look at your bad habits is a very hard thing to do. I know! A large salary can mask a lot until a financial crises hits.

  2. terrymac says:

    Amen! When I first got a big raise, and had no family to support, I couldn’t figure out what I had so little money to spend. I was eating out at nice places just about every night. When I switched to fixing meals at home, I had hundreds of dollars extra every month.

    When I stopped subscribing to a dozen magazines, I saved a few hundred per year.

    Discretionary expenses add up real fast!

  3. teresa says:

    It’s amazing how some people just don’t get it. I always put a cost perspective on everything I buy, I have a home daycare and get paid $2 an hour for each child so it is easy to figure out if it is worth buying something when I have to take care of a child for so many hours. Especially if we are having a bad day! I think if more people thought this way they wouldn’t spend so much hard earned money on a bunch of crap.

  4. Elizabeth says:

    I’m sure there are whole websites devoted to this question but how do you have the (REALLY) hard discussion with your spouse about spending habits without lots of anger and blame?

  5. coupons are fun says:

    n our case we needed to go from 2 incomes to 1 income pretty quickly. It became, for us, a matter of changed focus. At first it seemed like such a feeling of loss but them changed to a feeling of deep appreciation. Some of the cuts were easier than others. When we cut the home phone out of the budget that was easy. We hooked it up as a matter of habit when we moved. However, we found that we didn

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