Common Problems With Annual Spending Patterns

Common Problems With Annual Spending Patterns
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Sometimes people are fully aware of the spending issues present in their financial plan, but often people that live within a modest budget and pay all their debts on time with a nice cushion of money left over are not aware that even their spending plan might be a problem. Far too often, we accept the social and financial norms that have been established because we assume they are credible and have our best interest in mind. However, there are other methods that you can learn to save and spend money that will maximize your capital that also provide exceptional security. At Factum Financial, we are proponents of the Infinite Banking Concept, which is a system that gives you control of your own cash flow system. However, before you can start to adjust your spending and saving habits, you have to diagnose your current spending pattern.

Living Outside Your Means

This is one of the most common spending mistakes and it’s unfortunately all too common. Many individuals are living paycheck to paycheck with nothing in savings. One financial disaster could totally derail them and put them at risk to become destitute or even homeless. If this is the spending pattern you find yourself in, there are two things you need to remember:

  • You Are Not Alone – Millions of Americans live paycheck to paycheck. Something that’s even more encouraging is that millions of Americans have risen out of the paycheck to paycheck life. It’s very possible with just a little hard work.
  • It’s Never Too Late – You are not stuck in this life. It’s never too late to formulate positive spending habits and get yourself on solid footing.

Once you have accepted both of those things, there are a few steps that you need to immediately take in order to break free from this spending pattern. Invest your time into the following:

  • Create and stick to a budget – Too many people are at the very edge of their finances because they do not have a budget or they chose not to stick to their budget. It’s tough to take the tuna fish sandwich dinner at home over the night out for sushi with friends, but if the money isn’t in your budget for sushi, you have to stick to the plan.
  • Pay your bills on time – Not paying your bills on time only causes them to grow and it can affect your credit or eligibility for other things, so it’s imperative that your bills are part of your budget and you pay them on time.
  • Learn to save – Saving is one of those habits that can make your life easier. If you are able to save smart and to let your wealth grow, suddenly those nights out with friends that you have to avoid while you are learning to live within your means become possible again.

These are first steps for individuals that must learn to live within their means, but that’s not the only problematic pattern of spending that millions of Americans are locked into. Conventional saving and spending or the status quo for “prosperity” can also be detrimental in comparison to the spending power you could experience.

Breaking Free From The Established Spending Pattern

A lot of people don’t realize how much the average annual spending pattern actually costs them over the course of a year and especially over the time that we are working adults. In general terms, most people are spending around 20% of their take home income on vehicle purchases/maintenance, 30% (and sometimes more) on the costs of housing, and 40% of income on living expenses, with only 10% left to save and invest with the hopes of getting a good return on that small sliver. Given what we pay in interest in each of these areas, it’s a wonder how financial advisors can still tell most people to take that last little bit and try to earn high returns in a risky environment. As stated above, Factum Financial teaches people how to use the Infinite Banking Concept to recapture interest and grow their wealth in a safe environment. Here is a short video that breaks down these patterns of spending in simple terms:



Would you like to learn how you apply IBC in your financial plan and use it to maximize your annual spending pattern? Not only can you increase your wealth pool, but you can learn to use the Infinite Banking Concept to make your financial goals come true, like that car you have always wanted or that sweet new hot tub or home addition you have wanted to finance but haven’t had the wiggle room to do it yet. Contact a Factum Financial wealth strategist now to learn what you can do for your family and your legacy now. Our team will take the time to show you how the system that the wealthiest Americans use can work for you too. Call us now at (480) 525-8180.

Zachary Gray is the Content Writer and Editor for HJR Global and associated companies. Zachary lives and works in the Phoenix Valley and writes on a variety of topics.