It is crucial that every dollar counts in today’s economy. We are often tempted to spend too much and wonder where our money went. It’s so easy to swipe your bank card everywhere and anywhere, only to discover later that we have spent too much on things like movies, eating out, or the great 50% discount we couldn’t resist.
Many people believe that being debt-free is impossible. Living paycheck to paycheck is how we live. We have to pay rent, car payments, insurance, credit card debts, and so on. It is all too common for many to have to make tough choices about whether to pay the electric bill or buy groceries this week.
Here are 7 steps to help you take control of your finances and get out of debt. It is half the battle to achieve anything in life. I know this because feeling confident and “in control” of everything you do is key. You can feel confident in your ability to accomplish your goal.
Although these 7 steps are easy to follow, it is important that you do each one in the right order and stay committed to seeing it through. As you go through these steps, remember that you didn’t get into debt overnight. It will take time to get out. These are the seven steps:
1. For one month, keep track of every penny of your paycheck.
2. Set a budget and identify areas where you are spending too much.
3. Decide where and how to cut back.
4. As you save money, you can start to pay your bills on time.
5. Every dollar you bring home should have a purpose. This will ensure that your money is working FOR you. This will enable you to see how much money is left over for extra expenses.
6. Reduce your credit card debt and start to pay it off. You can list all your bills, starting with the lowest balance. Then you will pay more on the highest bill until it is paid in full.
7. Start saving for emergency situations. Save $1000 as soon as possible. Even if your paycheck is $20 or $25, it is important to save money each week. This will allow you to be prepared for unexpected expenses such as replacing the hot water heater or replacing the car’s fuel pump.
A well-maintained emergency fund can help you feel secure. You will be able to sleep better at night if you have an emergency fund.
Although this may sound daunting and overwhelming, it’s not impossible if you start at step one and continue through each step. You can get started on a plan, and work toward a goal if you just START. Keep in mind that “you can go anywhere if only you take one step at a given time.”