Money Management Part Two
MONEY MANAGEMENT, PART TWO
Starting today, make a commitment to stop acquiring new debt. Do not use a credit card. This may seem obvious, but if your debt is out of control, it’s because you keep adding to it. The first step on the path to debt freedom is to stop using credit. Don’t finance anything. Begin making purchases with cash as often as possible.
Spending with cash will often result in spending less impulsively. If you have to use plastic use a debit card.
In order to begin living within your means, you need to start by looking at where your money goes. This step will seem tedious
but you have to go the distance.
Step #3: Begin tracking your spending now.
The purpose of tracking your spending is to take a snapshot of your spending habits and figure out where it all goes. It is only by doing this you can begin to change your habits.
Track your spending and
- Begin to plug leaks in your spending
- Reduce spending where it’s possible
- See how reducing small amounts in lots of areas add up to something significant
In order to begin living within your means, you need to start by looking at where your money goes.
- Begin to live within your means (and save)
- Know where your money is going for a better chance of success
You will become a bit frugal and thrifty and feel accomplished in doing so. Don’t agree to a life of per-ma-debt (permanent credit card debt). Begin preparing for the future and live within your means.
ACTION: Track your spending.
1. For the next 30 days track your spending. Simply jot down what you spent and on what. That’s it. Begin today. Every time you write a check, pay with cash or debit card, jot it down.
2. At the end of the thirty days, categorize your spending (groceries, restaurants, entertainment, credit card bills, electric bill, haircut etc.). Be specific with the categories and total them.
3. Save all receipts.
4. For now, you are no longer using credit cards or financing anything.
Next, we’ll work on re-prioritizing your spending!