- Create a monthly budget and stick to it. This way you can keep track of where your money is actually going and apply it to where it is needed. Putting the numbers down on paper will show you just where all your money is going!
- Keep a journal for a week of everything you spend money on. Keep a running tally of how much you spend for a week. Then multiply this times twelve and you have your total for roughly three months.
- Get your last three months of pay stubs and determine your average monthly income by adding the totals, after taxes, together. Then gather three months of bills, add them up and divide by three to calculate your monthly fixed expenses such as rent or mortgage, utilities and phone, car payment, insurance and student loan payments. Add together three months of other monthly expenses, including groceries, clothing, credit card expenses, medical bills and the total from your weekly journal above. Divide by three and add the result to your monthly expense total.
- Evaluate your expenses. What can you cut back on? That morning cup of coffee can be skipped if you make your own at home. Small priced expenses add up and burden us. Choose one or two things you can skip from your journal and then add one item to the list every week.
- Make more meals at home. Take-out is not only fattening, but it is expensive. Pack your own lunch to take to work. Make meals ahead of time and freeze them if you don't have time to cook a dinner every night. Keep in mind that not every meal needs to be a feast. Have a salad, sandwich, or other small meal for dinners, instead of the five-course meal.
- Set up a savings plan such as a passbook account, certificate of deposit (CD) or individual retirement account (IRA), and begin making regular deposits. Check with your local bank to see what the best option is for you.
- Cut up all credit cards except one (you need one for emergencies). Transfer all credit card debt to that one card (make sure it’s the card with the lowest interest!). One bill is easier to manage, especially at low-interest.
- Overpay your minimum credit card payments as much as possible. A good rule to follow is to add whatever your interest fee is for the month to your minimum payment. This way you will be paying on top of your interest and your balance can actually go down instead of just being marginally affected.
- Realize that things come up in life that are completely unexpected and unplanned for. Car problems or health problems can and will occur at the moment you think you’re ahead. Keep plugging away at debt and stick to your budget as much as possible.
- Watch less T.V. (no home shopping channels) and no buying online, no catalogs. All of these increase the temptation to spend your hard-earned money!
- Buy generic, clip coupons, pinch those pennies!!! (roll them, too!)
- Cook large amounts of food at a time from scratch, as well as several different meals. Pre-packaged stuff costs a lot more and it's not as healthy, anyway. Freeze portions for meals later, during the week or when things in the pantry are scarce. This will also save time, and energy.
- Grow your own! Create a garden! Not only is it fun for the whole family, you can save a lot of money on food.
Once you have paid off most of your debt, you will begin to feel more in control and can start pooling more of your money into savings, college and retirement funds. Try to have an emergency fund that could carry your household for at least two months in case your income stops. That way, your debt will not begin to pile up again. Household Budget Manual