We have come up with a basic Personal Management quiz to make sure that you are heading in the right direction. And if you are Heading in the Wrong direction you can fix it.
1. Based on your current employment, income, etc. If you decided to do so, could you pay off all your debts, expect your home mortgage, within 18 months?
2. Are you an impulse Buyer?
3. Do you make impulse purchases with credit Cards?
4. Do you frequently make only the “minimum payments” on monthly credit card bills?
5. In the past year or two have you obtained a new additional credit card because your other credit cards were “maxed out”, charged to their limit?
6. Do you use VISA or MasterCard to purchase staples like groceries? Or do you get cash advances on these credit cards to pay for necessities, like phone bills or utility bills, rent, or car payments?
7. Do you have to choose bills to pay and bill not to pay?
8. Do you worry about being able to pay your bills? Do you get into family arguments about money?
Now the interpretation of your Answers:
Question 1:
If you answer is “No”, you are almost certainly “over-extended”. If it hasn’t happened already, you’ll be denied new credit in the future because of being over extended. If you answered “Not Sure”, you do not know enough about your total debt and monthly payment: you are not in control.
Question 2 and 3:
Many people shop an spend for emotional reasons: to relax: to ease stress: to get back at a spouse after a fight: etc. These and other “patterns”: of impulse buying can become very serous problems. If you answered “Yes” questions 2 and 3 - if your credit card bills feature the results of impulse shopping - you may be well advised to leave your credit cards at home (under lock and key) to use only for pre-planned purchases or emergencies. The slogan “Don’t leave home without it”, and other slick credit cards. That ideas is most likely to lead to unnecessary debt.
Question 4:
A “Yes” answer her e probably means that you are going to be paying on your credit card debt for a very long time. Paying only the minimums usually services only (relatively high) interest, and does little or nothing to reduce debt. For example, it would take 8 to 9 years to pay off just $1000 on a typical VISA or MASTERCARD, making only the minimum payment each month. A good rule of thumb for manging your credit cards is to always make at least double the mininum payment. If you cannot do this you are on brink of financial crisis. DO NOT IGNOR THIS BIG RED WARNING SIGNAL!
Question 5:
If you have obtained additional credit cards when you are already having difficulty making payment on the ones you already have, you are in serious trouble. This pattern is not a good idea…. for most people it only prolongs the day of reckoning when another new car CANNOT be obtained!
Question 6:
The only acceptable answer is “Never”, otherwise, this is a sure sign that something is wrong. Basic necessities and staple items should be easily paid with cash. Remember , in most cases cash advance begin incurring interest charges immediately: there is no “grace period” like there is on interest for purchases.
Question 7:
Even if this is only a “Sometimes” situation it is a serous situation. And if your answer is “Often” very serous corrective action is mandated.
Question 8:
“Sometimes” may be tolerable, but “often” is a serous warning that personal emotional and family crisis is just around the corner. At the very least, there are communications problems int eh marriage or family that must be addressed as early as possible.
Start this year off with some Personal Management and Sarate learning money saving tips