To Build Your Future, Pay Off Your Past

To Build Your Future, Pay Off Your Past

Wen Lu

3402049

As we all know that  we hvae maneuvered our “must-haves” to roughly 50%, our savings to 20%, and our discretionary spending to about 30%.If we want to build our future,we should focus on how to pay off our past.

Once you have a picture of your assets and liabilities, make an accurate list of the money coming into your household and where it’s going. Track what you’re spending on annual expenditures: clothing, vacations, property taxes, car repairs and so on.Once you have your annual expenditures, divide that by 12 to get your monthly expenditures. Weigh that number against your income and debts and see if you’re in a positive or negative financial situation.

If your budget isn’t balanced, you need to make some changes. A monthly budget can help you to decide how to spend your money, plan for your future, pay off existing debt, and save a few pennies each month by reducing wasteful and impulsive purchases.

Set a goal at the begining of the month. If your hope is to get out of debt, your goal could be paying off your credit card debt within the next three months, for example. With that goal in mind you can budget how much money from each pay cheque needs to go toward credit card repayment. Try giving yourself an allowance on discretionary spending. For example, give yourself $50 in cash at the beginning of the week to pay for things like lunches and coffees. If your allowance is gone by Wednesday, then should change your spending next week.

On the other hand, mindset is incredibly important and it has a tremendous effect on how we deal with money. No one wants to be looked down on so we sometimes make poor financial decisions to make ourselves look better. Eventually you have to learn to stop chasing the Joneses and start making better decisions, if not it is just an endless cycle of spending and debt.

In a word,we should try our best to pay off our past debt now.Then we can build our future...