Being in debt is not only worrisome; it is a feeling of being out of control. Debt anxiety can steal moments that should be carefree and happy, and turn them into time filled with worries about just how you can pay your debts. There are ways to become debt free and to experience a freedom like no other; time to spend enjoying life instead of being gripped with fear and stress.
Techniques
Figure out where every penny of your income goes each month. Make everyone in the household accountable for keeping track of their own money trail. By documenting in a notebook each expenditure, you will soon recognize where money is wasted. Just a small amount of money put in a vending machine for a morning snack at the office can add up to a large sum in a month's time.
Set the family down and make goals together. Plan a family vacation, or a special purchase such as a new van, or large screen TV. Budget each months household expenses and what you will need to pay all the bills according to the crown.org website. Give each member of the family a stipend each month to use as they please so that the budget will not seem like prison. Make certain they are aware that when that money is gone there will be no more until the next month. This will teach them how to save for something they really want and to think before spending money foolishly.
Build up a savings account to be used strictly for emergencies such as car problems, unexpected expenses such as an illness or plumbing problems. Keep in mind that buying the latest gadget that all your friends have is not an emergency. Do not touch this fund and strive to have at least $1,000 set aside in the fund, according to Dave Ramsey's website. Saving money for life's inevitable emergencies is one sure way to avoid credit card debt.
Cut up your credit cards, or if you must use them, pay them in full each month. It should not be necessary for a person who maintains a budget to be short on cash available for a purchase. It used to be impossible to buy something online or make other purchases, such as ordering flowers over the phone without a credit card. This is no longer true; using a debit card that draws directly from your checking account can now be used for all these purchases.
Sell everything that is not necessary. Have a garage sale, or sell old gold jewelry that is outdated. Sell your blood plasma at a local donor organization. Work a part-time job for a short time to boost your income. Pay down any excess money you bring in on your smallest credit card or other debts, such as car loans or furniture payments. Pay extra on the one with the smallest balance until you have it paid off. This will create additional money thereafter to pay on the next debt and so on. When you no longer have credit card debt or outstanding loans, you can start building a safety net by having a savings equal to three to six months of your monthly income. This will provide you with piece of mind just in case you are laid off, fired or are disabled for a short time.
Warning
The reason most people fail at budgeting their money is that they are not consistent. You must plan a monthly budget each month and stick to it from now on. Once you are free of debt you will have more money to use for things that are important to you and your family, and to give away to causes that you care about. After all, isn't that what real living is all about?
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