Many Americans and people in countries where ready credit is available find themselves in greater debt then ever before and this makes you wonder whether you are working for yourself or for your creditors. This ends up being a problem of financial spending & control and if you take a short moment to reconsider your own financial health, you might be able to correct your financial situation today.

You will find that many people today are living from paycheck to paycheck and running from payday loan provider to another. This article suggests three simple & quick ways to improve your personal finances.

Firstly, you might want to draw up a Cash flow statement for yourself. This is quite simple to do actually. Just take a blank sheet of paper and draw a line in the middle and consider how much money you are earning each month and list all the sources on the left and total it up at the bottom. Next on the right column figure out how much money you are spending each month, including how much interest and debt you need to repay. Take your credit card statements out and use it to work through this section. Once you figure this out, then you will be better able to manage your own finances or at least have a better idea about your spending habits.

Secondly, budget to save before you spend. This idea is taken from many millionaires who recommend that you use auto-transfer each month a sum of your money and either save it or invest it into some thing like real estate. My personal favourite idea is to take a sum of money each month and use it to purchase my favourite Exchange Traded Fund which works like a mutual fund only that it just buys up the entire index of stocks. This way you do not need to work about over performing or underperforming the market and the management fees for these funds are really low.

Finally, now that you know how much money you have left to spend each month, budget how much you want to spend each month. As terrible as it may seem, try to pay for things with cash and with a debt card so that you are kept in touch with how much you are actually spending. Its so easy to flash a credit card and then lose sense of reality and you only get hit with it at the end of the month when the bill arrives. So try to remind yourself constantly about the need to avoid spending exuberance.

In conclusion, doing a simple cash flow statement ever so often helps to keep yourself reminded of how your spending and investing patterns are each month. Budgeting to save before you spend will ensure that you will retire quite well off and budgeting before you spend will help you figure out how you want to use your available funds each month. Remember that the more credit you use on consumer products which drop in value really fast, the most the credit card companies are going to make from you and the less you will have to spend in the longer term. Take control of your finances today and you will find your life starting to look brighter and happier.

Copyright © 2006 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)