Achieving a debt free lifestyle is a noble goal. I talk with plenty of people who desire debt freedom, but turning a dream into reality takes work. Now this work is not impossible. Quite frankly it’s very doable. You just have to work it.
The first step in any personal finance course of action will be to know your status. Knowing how much you have coming in vs what you have going out. That’s called a budget.
A budget can be as simple as you’re A,B,C’s:
You don’t need fancy software or sophisticated spreadsheets to create an effective budget. Get the basics down (income minus expenses) in written form. That’s a great start.
With your financial snap shot in hand, you’ll be better able to determine whether you have an income problem or a spending problem. Here’s how you can tell.
On paper you should have more money at the end of each month. In reality, you may find yourself borrowing from savings or friends and family to cover necessities. You work hard every day, but can never seem to figure out where your money goes. You know you should be further along, but money burns a whole in your pocket.
If spending on impulse without a clear picture of your financial snapshot is a regular occurrence, you may have a spending problem. Blurring the line between a need and a want, carrying balances on credit cards, or an inability to remember what those balances represent may all point to signs of a spending problem.
There is good news. Spending problems necessitate a change in behavior. You may very well have the resources needed to right your financial ship. For those with a spending problem, consider the following suggestions to make adjustments in your regular routine to get a better handle on managing your money.
- Write down you goals,
- Share them with a friend, and
- Review those goals weekly.
Applying positive peer pressure to your financial goals is a great way to overcome your poor spending habits. Connecting with responsible accountability partners can do something as simple as remind you of the goals you’ve set. At a minimum, you can join forces with a team that uses the Power of Community to help you dump debt.
You have the money to accomplish your goals, you may just need help or the discipline to redirect the funds in a more productive direction. While not easy, small changes can lead to long term success.
An income problem requires a different approach. Obviously, no one can squeeze blood from a turnip. If you’ve confirmed with an objective third party that your budget contains no excess or spending on unnecessary items, then it’s time to look at additional ways to generate income. Your goal should be to generate $500 to $1000 extra per month in order to attack your debt
A debt free lifestyle is an attainable goal. We’ve talked to many people through the Midday Money Show who have taken on the challenge and emerged victorious. You can as well. Check out the podcast tab for a list of past shows or subscribe on Stitcher Radio as a source of motivation to stay focused on your goal. Always remember, you’re not alone in this. We want to help you be victorious.
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