Looking at Your Spending and Debt
- Is Your Spending out of Control?
- Your Consumer Debt Ratio
- Calculating Your Total Debt Ratio
- Why Have I Gotten Into Debt?
- Income and Expenses
- Figuring Out Your Paycheck
- Expenses Line by Line
- Constructing a Spending Plan
- Case Study: Jennifer–Things Gone Wrong and How to Fix Them
- Forecasting Income and Expenses by Age
- When You Have Too Much Debt
- Allowances
- Saving Money on Company Benefits
Forecasting Income and Expenses by Age
Predictions for future spending are most accurate when adjusted for your age.
To Age 35
In your spending plan, allow for:
- paying off student loans
- buying a house
- combining incomes with a spouse
- starting a family
- saving for emergencies
- saving for retirement (it is never too soon!)
Age 35 to Age 50
Think about:
- emergency funds
- non-working spouse
- paying off the credit cards
- taking care of aging parents
- college for the kids
- retirement getting closer
Age 50 and Above
Things to consider:
- lifestyle changes in retirement
- increased health care costs
- taking care of aging parents
- smaller house?
- adult children moving back home
- more travel?
- emergency funds (always)
- eating out more?
- paying off mortgages and loans
- no work clothes
- no commuting
More Things to Think About
Be realistic. If you spend $500 a month for food now, you are not going to be able to cut it to $100 next month.
- Do things gradually. Cut your expenses in any given area by 10% or so at a time. See if you can live with it. Then cut a little more.
- Make allowances for inflation. The cost of goods and services goes up a little bit each year. Historically, the amount is between 3% and 5%.
- Expect the unexpected.
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