In a perfect world, we would all avoid too much credit card
debt and would never have to deal with the desperation of being unable to meet
our credit card payment obligations.
We'd never have creditors hounding us for payment.
We'd never know the frustration of not being able to afford
what we really want because every extra cent has to go towards keeping up with
the minimum payments on our credit cards.
But this isn't a perfect world, and unfortunately these
distressing situations are the norm for many people.
If you find yourself in this position, or headed there, take
control of your spending now. Don't wait until your situation is so dire that
you have few options available to you.
1. Commit to the cause — Before you get started, you need to
commit to your own cause. Because if you don’t, no one is going to do it for
you. Tracking your spending can be an eye-opening experience, but it’s one that
won’t work without the full cooperation of your family members. In other words,
don’t do it halfheartedly. Remember, you have to want it.
2. Keep receipts — You’re probably going to hate what I’m
saying, but you really need to keep receipts for all of your purchases for an
entire 30-day period. This can be quite a hassle, especially if you’re not used
to doing it. However, it’s an essential part of the process. Embrace it.
3. Track your spending online — In addition to keeping track
of all those receipts, you’ll also need to keep track of your online spending.
This can include bills that are paid online, online shopping, and even credit-
and debit-card transactions. The goal is to get a clear picture of all of your
spending, so it’s important to include every single transaction you make during
the entire 30 days.
4. Tally everything up — Once you’ve gathered your receipts
and online transactions in one place, it’s time to tally them up. Start by
lumping similar purchases into categories that make sense. Your categories will
vary depending on your specific situation; but they’ll probably include things
like groceries, restaurants, gas, clothes, medical bills, hobbies, and home
maintenance.
5. Be honest with yourself — If you track your spending for
the full 30 days and are shocked by the results, try not to make excuses for
your behavior. Remember why you started tracking your expenses in the first
place and try to learn something from the experience. If you don’t, you’re just
resigning yourself to the life you’ve been living up to now. Remember where
that road leads. Nowhere.
The truth is, tracking your spending is the easy part.
Learning that you’ve been completely reckless? Now, that’s hard.
On the other hand, you can’t change what you refuse to
recognize. You can’t tackle a problem that you don’t even understand. Tracking
your spending will probably be the most painful part of your journey. Likewise,
it’s the most important. Because when you see your own spending on paper — in
black and white — you can no longer blame the kids or your busy schedule. You
can’t complain that you “just need a raise,” or point to high taxes, the
government, or anything else as the source of your woes.
We often create our own prison cells, either out of habit or
laziness or because we fail to plan. And when we do, it’s easy to blame
everyone else and think that escape is impossible. And that’s why tracking your
spending is a crucial piece of the puzzle: It forces you to come face to face
with the biggest threat to your financial future.
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