By Mike Aux-TineeAlright, let’s be honest. We are carrying too much debt and doing so is making our lives much harder and less happier. Let me start by saying, if you think you are ‘rich’ because you have a credit card, that is not correct. You have a line of credit that you will need to pay back. You can not simply discharge your credit card debts. They will stay with you until you pay them off. If you use a credit card to make a majority of your purchases and do not payoff your balances every month, you are simply turning over your more of your hard-earned money than you need to. You can go on and ignore reality, but do not complain when the bill comes due. This bill is coming due and much sooner than you think! You are the one who put yourself into this position. Do not blame the credit card companies, the countless advertisements or your neighbors . This problem is your own making. Just look at yourself in the mirror and scream it out loud, “You did this to me! I am going to get out of it! “ Once you have come around to the idea of spending cash, you can regain control of your life. These changes will move your life off the credit card track and onto something much better. That is, making more purchases with cash instead of with a credit card. Doing this, should help focus on your spending and ultimately save more than you spend. This will not be easy and you will need to make sacrifices and so will your family. Remember your new mantra, “I did this and I have to get me out of this.” The first step in the process will be to create an income and expense sheet. This is not a complex process. Just take a piece of paper and a pencil. Yes, I did say, use paper and pencil. I do not want you to work off a computer. The psychological impact of using paper and pencil will become more apparent. On one side, under income I want you to list all sources of income. This includes:
- Primary employment
- Part-time work
- Rental income
- Other sources of money coming into your bank account every month.
- Then add up the total and this is your monthly income.
- Rent or mortgage payments
- All utilities
- Car payments
- Cell phone bills
- Cable tv (or whatever you have)
- Transportation costs (gas, oil changes and maintenance for your car or cars)
- Eating out
- Spending money
- Anything else where money was leaving your account. But I want you to list everything, even one time items. Now, add up the total and this becomes your expenses.