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Enjoy Debt-free Living!

Guest post by: Millard MacAdam

Article Overview: In tough times the truly tough and frugal get tougher. By avoiding debt, they reduce worry and stress, maintain peace of mind, consistently maintain great credit reports, and save thousands of dollars not lost to high interest rates. Read on to discover key issues you can address to gain and maintain a debt-free life.

Enjoy Debt-free Living!

In tough times the truly tough and frugal get tougher. By avoiding debt, they reduce worry and stress, maintain peace of mind, consistently maintain great credit reports, and save thousands of dollars not lost to high interest rates. They save and pay cash for their cars and pay their savings account a bit each month and let it compound for the future. They gain and maintain a "financial cushion" for the unknown expenses that can suddenly come crashing in on them. This is in the form of a sizable, not-to-touch savings account. There is no secret to being debt free. Spend only what you have. Period! The key to staying out of debt is focusing on it and engaging in the personal discipline of refusing to spend what is not yours. You must intentionally control your spending! Here are some issues related to debt for you to think about.

Identify Why You Went Into Debt - If you are in debt or have been in debt, you need to identify and list on paper the reasons why you went into debt. You cannot ever fight against an enemy that is unknown. The reason is you are always spending too much money. At times the spending is understandable when purchasing a home or taking care of unexpected medical bills, but if you're in debt it means you are spending or have previously spent more money than you had.

Too Much Debt Comes From A Lack of Discipline - In our convenience oriented world people often do not really interact with cash. Their pay check is automatically deposited. Their bills automatically withdrawn. They pay for groceries, gas, and goods with a credit card. So they never really interact with cash. Why pay attention to it? Why spend time with it? As long as there is money in the account, and even when there is not, I can still charge that item, so why spend time trying to figure everything out? Carry cash and park your credit cards and you'll save around 30% per month! The power of giving out cash to make you thriftier is immense. Try it!

Control Your Debt By Dealing With Your Lack Of Contentment - Lack of contentment? Not really sure about this one? We're a people who seem to think we "need" a lot. I think people confuse true and legitimate needs with their wants and desires. I don't know if we're not content, or greedy, or needy, or just have a high level of wants and desires. We probably have a bit of all of these things within our motivations.

Searching For Security Can Be A Debt Factor - Searching for security? Be honest. We all feel a little better when there is a cash cushion in the account. The question is always when does saving become hoarding, and when does security become a false security with misappropriated hope? I suspect there are a lot of us who feel less secure after the 2008 experience than we did prior, and yet the God of all creation is the same yesterday, today, and tomorrow. Interesting to consider.

Searching For Significance May Result In Unpaid Bills - There is a lot to this. Power and significance go hand in hand. Seems as though the Bible does not have a lot of positive things to say about humanity's quest for power.

Ignorance - Many people are in debt simply because they thought debt was the right or best way to succeed. They have not had much teaching at home. They did not get any teaching in school. One cannot know unless he has first been taught, unless he can teach himself. However, that would require self-discipline which we have already recognized is in short supply in the financial realm.

Know Your Spending Weaknesses - Similarly, you must also know yourself. What are your spending weakness and temptations? What budget categories do you often overspend? Charitable Gifts? Housing? Utilities? Food? Transportation? Car Gas? Clothing? Medical/Health? Insurance like Auto, Health, Life, Disability? Debt Repayment?

Develop A System Or Structure To Help You Control Your Spending - Larry Burkett suggests the following in the book, Money Matters. For anything that you want to buy that isn't already in your budget and costs more than $10, you get three additional prices and wait thirty days before you buy it. That will give you time to shop for a better price, and often it allows enough time for the impulse to pass.

Sometimes you will find that full, complete, and absolute avoidance is the best policy.

Minimize Your Mall Spending - If you spend way too much at the mall you might need to completely stop going to the mall. Limit and list the number of stores you will visit. Limit the amount of time you will spend in the mall. Fact - the more time you spend in the mall, the more likely you are to spend money. Always shop with a list. Check your budget before you leave the house so you know how much you can spend. Leave your credit card at home and take only a budgeted amount of cash. Call your spouse and discuss it before you buy anything over $20.

Wait till the next day or two before going back to the store to buy the item. Here's the good news with controlling your spending. You start to feel increasingly free and less enslaved! It might be hard controlling your spending the first time or two, but in the end you will feel so much better about yourself and about your budget.

Here are some tips to help you control your spending:

· Cut up your credit cards or at least put a rubber band around them all and put them in your dresser drawer.

· Cancel your credit card if you are ever in a position that you can't make your first payment.

· Pay cash for your vehicles.

· Develop a budget and stick with it.

· Stop listening to people who tell you getting out of debt is easy.

· Stop trying to get rich quick.

· Keep every receipt for every item you buy and review them monthly.

· Take a friend shopping with you who agrees to help you be accountable to your financial goals.

Consider Using The Basic Envelope Budgeting System - If you're not into using a more complex electronic budgeting system, this one works and is very basic. It's generally a very successful way to make a budget and keep it. It is a bit primitive in our technologically advanced society. However, most Americans are in debt up to their eyeballs, largely due to the fact that technology has made it very easy to go in debt. So, if primitive works, why not use it? Here are some suggestions:

1. I would suggest paying all of your bills like your mortgage, electric and phone from your checking account. I would then use the envelope system for the remaining money. This is what my wife and I have done for decades, and we're totally debt free. We plain don't spend what we don't have in the bank.

2. Make your list of items that you need to budget for like groceries, gas, entertainment, and clothing. For this system, I suggest making the categories as specific as possible.

3. Now that you have a list, estimate a monthly or bi-monthly dollar amount that you will need next to each item. If you don't have good records of your spending, this may take a couple months to get the right numbers.

4. Buy a box of envelopes, get out a big, Sharpie marker and write a name on each envelope like Groceries, Gas, and Entertainment.

5. Get cash from your bank account and fill each envelope with the allocated amount. The key to this system is that when the envelope is empty, you are finished spending in the given area for that period. It forces you to plan ahead based on how much money is allocated to each area of your budget.

I think it's a good idea to create a "Miscellaneous" envelope. I expect that you will find something to use it for that you had not planned. If you don't, then let it keep getting bigger until you do have a need to spend it. You'll need to make adjustments the first few months as to what you need to budget for each item, but just start the process and keep adjusting the amounts you budget it until it is just right. Remember, the key is to not spend what you don't have!

If you need help in mastering and implementing any of the skills and tactics mentioned above, I'm here for you! Please visit the Call-A-Coach section of my web site for more information, and contact me if you have any questions.

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Article Tags: credit reports, debt, eliminating, peace of mind, personal finances, reduce spending



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