Track All Your Spending
Once you have that habit mastered you need to stop money leaks in order to get out of debt sooner and spend money on the things you really need.
Now often women get the bad wrap for this spending too much money.
In fact my father called me the other day and related a conversation he had with my 6 year-old daughter. He told my daughter that women just love money, in fact so much more than men. Basically telling her, and then me that women just like to spend, spend, spend.
But men have their vices as well. Cars, boats, 4-wheelers, the list goes on. Sometimes men may not spend extra money often but they make up for it by making big purchases occasionally.
Most of the time there is no difference between the sexes, it is all a perception.
The other day my husband berated me for spending some extra money I had on Pizza because I was in the mood for it and didnt want to cook. In fact he went on for a few days about it. Then we went shopping at the grocery store. I was frugal and bought only needs. But when I met him outside he had bought $20 worth of raffle tickets in hopes of winning a shotgun. The exact same amount as I had spent on the pizza.
My point, we all can stop money leaks. Dont think it is just your spouse. Work on this together and decide honestly where you can make changes.
In order to stop money leaks you need to look at the spending reports you have created. Most budgeting software or online bank statements can create these for you. You will see trends. Maybe most of the extra money goes to one store, or is spent on the weekends. Whatever it may be take measures to avoid those places or events. When you track all your spending it becomes obvious where some big leaks are.
This doesnt mean that you can no longer have fun. Maybe set a limit on exactly how much money you can spend on extra things, and stick to it.
One of the biggest reasons it is hard to stop money leaks is because we are constantly being marketed.
We go to the store and something look so great, or needed. Or our kids watch a fun commercial and need something right now. You need to realize that advertisers, marketers, creditors are working against you. They want to get your money. You have to protect it by thinking in a new way.
You need to see that you are being manipulated. To stop the money leaks you have got to make a decision to not fall for it. Set some sort of standard for yourself and your family. Here are a few examples.
There are many tips and books about this. The point is come up with some kind of system or guideline to insure that you do not give into impulse buying. It will eat away at your amount for debt.
When you stop money leaks you are keeping in mind your end goal of getting our of debt.
Being independent. Not relying on your next paycheck to survive.
There are more tips as well, consider how much you pay in insurance. Are you over insured? Are you spending more in premiums than you will ever recoup?
For example raising your auto deductible and saving the difference can save hundreds per year.
Having too much life insurance is another area. Be aware that life insurance is supposed to replace your income once your die. So that if the death benefit is invested you could live off the interest. The point of life insurance is not to leave your family filthy rich. If that is your goal you can do much better by investing your own money. I am not an expert so consult one before your make changes.
Be aware that agents will sell you the most you will buy. You may not need that much.
You can stop money leaks by simply watching where your money goes, being honest with yourself, not giving into manipulations of advertisers, and cutting costs in areas such as food, insurance, gas, and finding cheaper hobbies. You will discover that life is still exciting and fun, but less expensive. You will be surprised and delighted at the results. Plug the money holes.
"A man in debt is so far a slave,"