You can think that when you observe someone buying goods and services, it is easy to identify too much personal consumption. This observation may be correct, but it is possible to judge the observer and sometimes there is not enough information to observe the observed person. A better approach is to assess individual spending in the context of achieving the desired goals and then determine if the spending model can support the resource needs to achieve the desired goals. Here's a basic plan that can quickly help you determine too much personal expenses.
1. Establish a future reference by visualizing the desired position from three to five years from today. It is best to identify long-term positions first in the short term to stay focused and motivated
2. Write this visualization in a statement titled "Vision Statement" and include the expected emotional response when you achieve your goals.
3. Write an achievement goal that is critical to achieving your vision in each of the following areas: social - for example, marriage, or for children or major holidays or visits to at least three continents; education - earning an advanced degree or certificate or Career change; finance - double family income or entrepreneurship or setting up a fund for children's education; and personal health - active participation in "good" health habits
4. Predict the dollar amount needed to achieve the goal and achieve your vision within three to five years
5. Determine your current spending pattern/month to determine if you have the resources, or if you need to make adjustments to achieve your vision within three to five years.
This step-by-step approach allows for self-assessment to determine your consumption patterns and provide you with data to determine if you are over-consume.
Orignal From: Personal finance - how to determine excessive personal consumption
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