Question: Why are you having money problems?
Answer: There is an imbalance between the money you are receiving (income) and the money you are spending (expenses).
Complete Answer: It is literally that simple. And I assume that if you are having money problems, it’s because your spending (expenses) is greater than the money you are receiving (income)—you are living beyond your means. You could be living below your means, with income greater than your expenses. But most people would not consider that a problem. Ideally, you should be living within your means. As was discussed in the recent July 25 post, you should be 1) paying all your monthly bills on time, 2) saving money for a rainy day and 3) be putting money away for retirement.
To solve your money problems, you will need to correct the imbalance between income and expenses. You will have to increase your income or decrease your expenses. We will address both in upcoming posts.
Financial Literacy Knowledge/Skill: You should be able to state clearly why you are having money problems. For example; “My income is too low” or “My expenses are greater than my income.”
Comments or Questions: Thank you for visiting the Financial Literacy Life Skill site. Please feel free to submit comments and questions you may have about managing your money (Financial Literacy).
Next week’s topic: How do you increase your income?