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Making Some Adjustments


Want versus Need

Not everyone is happy with the way they spend their money, particularly after reviewing their spending in detail. One of the most upsetting feelings comes from being unable to account for large amounts of cash spent from week to week. How many people do you know who actually account for the cash they take out of the ATM machine? Where does their money go? Where does your money go? Was part or all of your cash withdrawal for something you really needed, or was it something you simply wanted?

The trick to overcoming feelings of despair and helplessness that can often arise during a career transition is to track your cash expenditures item by item. Identify the things that are really important (needs) and reduce or eliminate the discretionary items that may be unnecessary (wants).

How much of what you purchase do you really need? Needs are pretty simple—food, clothes to cover our backs, and a roof over our heads. Everything else is simply a want. (We know, you need to pay taxes, and you need a car to get to work; but you get the point.) Normally it is okay to spend money on things you want (assuming it fits your budget), but it is important to control this urge during your career transition. The more you spend, the sooner you may run out of money.

Family Matters

Most of us cannot make financial decisions in a vacuum. Our decisions and actions impact others. It is important that you involve your family members in the decision-making process, and enlist their help in cutting down expenditures. Change does not happen unless everyone agrees to it.

Easy to say, not so easy to do. No two people have the same exact priorities when it comes to money. We suggest that you start involving everyone, even the kids. It will take time, love, energy, and a little bit of luck. Try to agree on a plan as a family. It will all be worth it.

Keeping Your Expense Records

If you're really going to understand where all the money is going, you need to start tracking every expense. This may seem tedious, but it is the best way to identify expenses that aren't really necessary.

Write down everything you spend money on, and whether you use cash or credit cards. (Try to avoid using credit cards if you won't be paying off the balance each and every month.) It is easy to lose track of how you spend your money, particularly cash. Think about the last $50 you took out of a cash machine. How much of that can you account for? If the question has you scratching your head, then keeping an expense record is a very good idea. Recording your expenses will also make you think twice before purchasing an item.

Don't forget—every dollar you spend erodes your net worth and can put you further in debt. Below is a sample expense record format you can keep in a pocket-sized notebook.

Expense record for:

Expense Item

Date

Amount

Cash or
Credit

Reason

____________

___________

___________

____________

____________

___________

___________

____________

____________

___________

___________

____________

____________

___________

___________

____________

____________

___________

___________

____________



Investments and Insurance products:

NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
NOT A BANK DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY


Securities and advisory services are offered through Santander Investment Services, a division of Santander Securities LLC. Santander Securities LLC is a registered broker/dealer, Member FINRA and SIPC and a registered investment advisor. Insurance is offered through Santander Securities LLC or its affiliates.