First Step in Debt Free Living – Controlling Your Spending

The first step to financial independence and debt free living is to control your spending.  We live in a consumer driven world that encourages the use of credit for every purchase.   As a result, Americans are burdened by excessive consumer debt.  A recent report by the Federal Reserve stated that Americans owe approximately 826 billion in revolving credit card debt.   The burden of this debt is overwhelming families and robbing them of their hopes and dreams for the future.

A roman author, Pubilius Syrus from the 1st century wrote this quote 2,000 years ago.   “Debt is the slavery of the free”   How much more true is this quote today? 

If you are ready to take control of your financial future you must start by taking control of your spending.  Here are some proven tips and ideas to that are easily implemented that can dramatically impact your personal finances.

Breakout Your Expenses – Pull out all of your credit card statements, bank statements,  etc. and breakout all of your expenses into specific categories.   Create a ledger and enter each individual expense into the appropriate category.  Review each expense to determine what is a regular monthly recurring living expense and what were discretionary purchases.    Then total each category for last month.  This first step will provide you with some interesting data on your spending habits.  It will also provide you ideas on where you can start reducing or eliminating unnecessary expenses.

Track Every Expense for 30 Days – This exercise is absolutely critical and it will provide you some great insights into your spending habits if you track every dollar you spend for 30 days.  Use the memo pad in your cell phone or keep a small notebook with you to write down each expense as it occurs.   Don’t see this exercise as a burden.  Have some fun with it.  Set up a ledger with different expense categories and enter all of your expenses at the end of every day.  Use the same ledger system to enter all of your normal payments on the 1st and 15th as well into their specific categories.  

Debt Free Living is Possible – What if you were debt free?  How would you live differently?   Debt free living can be a reality for anyone that is willing to commit to the goal.  I hope you will take some time as part of this exercise to stop and think about your life, your finances and your hopes, goals and dreams for your life.  Take the time to reflect on how your debt has impacted your life and your finances.  More importantly, take some time to declare some new goals for your life.  Goals based on being debt free.   Goals that will motivate you and inspire you to take action today to take control of your personal finances and change your life forever.   See my previous post Financial Literacy begins with – The Power of a Vision to Transform Your Life and Your Finances.

Accept the Challenge – I hope you will make the commitment to track your expenses for 30 days.  The exercise is truly valuable.  It will provide you new insights into where all of your money goes every month.  It will also provide you with some ideas and insights on how to reduce or eliminate unnecessary expenses.  This is the first step in taking control of your finances and moving closer to debt free living and achieving financial freedom.

Challenging Our Family –  I am going to take this challenge as well.  I will keep you updated on my progress, my breakthroughs and my insights.   This will be a great exercise for my wife and two teenagers.  We will make it a fun family challenge with a prize for achieving the goal of tracking every expense for our entire family for 30 days.  This is an excellent opportunity to share financial literacy lessons with our kids.

Quotes to Motivate and Inspire:

Empty pockets never held anyone back.  Only empty heads and empty hearts can do that”  Norman Vincent Peale

“A miser grows rich by seeming poor.  An extravagant man grows poor by seeming rich” William Shakespeare

“If you would like to be wealthy, think of saving as well as getting” Benjamin Franklin

“If you want to feel rich, just count the things you have that money can’t buy” Proverbs quote

“It is not how much you earn, but how much you save”  Anonymous


I hope you have benefited from this post on Financial Literacy.  If so, leave a comment.  In addition, please forward this to anyone you think might benefit from this short financial literacy lesson. 

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Explore posts in the same categories: Budget, Financial Literacy, Fiscal Literacy, Goals, Inspiration, life, Money, Personal Finances, Success

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