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Outsmarting Debt
Money! There’s a word no one can feel neutral about. There’s no denying that the pursuit of money, even if it is just to feed and clothe our families and put a roof over our heads, consumes more of our time than eating, drinking, or spending time with family. Whether we love it or hate it, acquiring money is an indispensable part of modern life.
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"Every household wastes a certain amount of money each month, and that is the money you will use to get out of debt."
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The problem is that, for most of us, there is simply not enough money to go around. If you often find yourself living from paycheck to paycheck with little left over for any unexpected expenses, then you’re among the norm. That’s why even the smallest setback can send so many of us into a near panic.
The key to financial maintenance is to be able to outsmart all those who want to take the money you worked so hard to earn. To stay on sound financial footing requires that you follow four basic principles: 1. keep your expenses at a lower level than your income, 2. avoid impulse spending, 3. pay as you go, and 4. keep money evaporation at a minimum. Let’s show you what we mean.
1. Expenses Must Be Less than Income
Spending less than you earn will be your key to financial freedom. This will bring financial independence and provide you with control of your life. Living on less than you earn proves you are smarter than a banker. You learn to beat the banks at their own game. It is not only key to independence and freedom from debt but essential to future planning.
2. Avoid Impulse Spending
Work as hard at spending your money as you do earning it. Some people look at shopping as a form of recreation, but recreational shopping can be almost as dangerous as gambling. Learn to know what you are going to buy before you leave the house. Estimate the cost of the items you are going to buy. You may try using the Internet to check prices before going to the stores. Many sites offer comparative pricing, which allows you to get a better idea of quality and price and helps you avoid the impulse to buy just to regret the purchase later. Then when it comes time to make your purchase, stay within the limits you have set.
3. Pay as You Go
You want to get out of debt, right? Being debt-free is a mentality that must be instilled within your mind. You must pay for every expense as it comes and you must pay it in full. What if you don’t have the money and you haven’t planned for something that your family really wants? Remember that there is a certain amount of joy that comes when your family plans for and anticipates a purchase. Set a goal and game plan that will help you save enough money to purchase the item in the future after having worked and saved.
4. Keep Money “Evaporation” to a Minimum
One problem with money management is the inability to account for money spent. This is especially true of cash. When you carry a large amount of cash it becomes extremely difficult if not impossible to recollect where it was spent and for what it was spent. The money just evaporates.
In addition, carrying cash offers an almost constant temptation to spend for unplanned items. Try to make all your purchases with checks issued for the exact amount and resist the temptation to make them out for a few dollars more. This offers you a record of your expenditures. Also, avoid using a credit card for groceries and gas unless you plan and execute paying off the credit card each month! Keep your receipts and deduct them from your checking account immediately so that you know where you stand.
It doesn’t matter how you record your spending, just keep a record. This keeps “evaporation” to a minimum.
>> View the Complete Article Here
By Lyle and Tracy Shamo LDSLiving Magazine Jan/Feb Issue
>> Click Here for Information about LDS Living Magazine
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