The first step in conquering debt is to get control. Everyone functions better on every level if they are in control. Our finances, if not under control, can send us into a downward spiral if we don’t feel that we are in control. A way to understand your financial situation and determine the best way to conquer debt is to track your spending. This can be accomplished by simple discipline. Just as you would keep a food journal if you were trying to lose weight, you should keep a spending journal if you’re trying to understand you finances.
This can be done by simply keeping a small notebook in your pocket or purse and writing down every purchase you make. Just as the food journal makes you realize how you are over eating, a money journal can help you to understand unnecessary purchases that you and your family make on a regular basis. Once you have determined where your money is going, you are ready to come up with a budget.
Although a budget is something we dread it can actually be a fun experience if approached the right way. The first part of budgeting, admittedly, can be painful, but if you gain control of your money you will be suddenly empowered. There are many different approaches to budgeting. With a plethora of budgeting apps, programs, and designs at hand, sometimes we over complicate the entire process. And what happens when things are over complicated? We give up. Everyone has a different style, for some keeping everything on their phone is best.
These types can keep up with their calendar, social life, and shopping all with their phone. For others, the old pen and paper can be their best friend in budgeting. Whatever route you take, make it work for you. List your income and every expense. For some making a yearly budget works, with specifics for each month. Still others create a new budget at the beginning of each month to compensate for birthdays, trips, sports, etc. The key is to figure out what works for you and make it fun by including the entire family in the process.