We are all consumers and financially fall into one of 3 financial categories.

• Family #1 - We as a family have all the money we need for the basics and extra and manage the money and resources well.
• Family #2 - We as a family have all the money we need for basic everyday needs and some extra but live payday to payday with debt growing slowly.
• Family #3 - We as a family do not have enough to meet our basic needs

The problem I see among many owners of debt is that all of the families above in the debt categories could all have the same family size and income.Each of the families could have unique or special circumstances but in general most people live a lifestyle above what they can really afford.

Family #1 I'm sure lives on a budget and do not pay extra for things like their house, cars, utilities or other items they consume. They fund both long and short term savings. They budget for future cars repair, household appliances and other unexpected expenses which happen doing life. Their planning stops or reduces the use of credit cards saving them untold dollars in interest.

In short - they planned their future.

Family #2 is in the process of working on a budget (or think they are) and want to establish a budget as a permanent financial road map of their future spending, but don't honestly want to do the work required. They want the money and debt thing to just "happen". They may be over paying on rent or house payments. They examine their spending and see where they could have saved money if they would have put a little more effort or research into things before making a purchase.

Their long and short term saving is pretty much non-existent. They use credit cards instead of cash, pay finance charges and penalties which are unnecessary. The accept financial problems as a way of life. They don't plan or know how to manage their money.

Family #3 long ago gave up on budgeting. Each and every month, or week they come up short with never enough to pay for the basics. Housing, food and putting gas in the car is a task. Credit cards are only something they dream about. Sometimes this is from circumstances out of their control but usually it's bad daily choices.

Financial Family Needs

Family #1 - If you are not a part of family #1 find out how you can get some counsel from them on handling your money. Otherwise - leave them alone.

Family #2 - This family unit needs to look for help and advice to start modeling the money patterns of family #1. The may need a debt management company to help them get things under control.They need to find out first where their money is being spent, create a budget and stick to it like glue. As they go through the steps of finding out what they are spending money on they may need to take steps to reduce debt and expenses. Credit cards need to be taken away or cut up and begin to attack their debt which could tke years to pay off.

Family #3 may look like a lost cause but if they get serious they can slowly begin to head down the right path. They need to look at every possible solution and method they can find to reduce expenses. Look for a new job or take on a second job. Begin to look for ways and people to help you get a handle on reversing the pit of debt you are digging.

Which Family Describes You?

It doesn't matter where you are at family wise 1, 2, 3 - there is hope.

The first step is to take action and begin to learn how to manage your finances. It is absolutely necessary for you to began improving your financial postion.