The above purchases are commonly done by signing for loans or using credit cards, and are often not in your budget.

 

Before making an impulsive purchase, make it a habit to “sleep on it”, analyze if you truly need this item, or if you were just caught up in the moment, perhaps under a trance induced by advertising or a flashy display.  Do you really need that new car with those options?  Will you really get value out of the home theater system?  Do you really need the new computer or just more memory for the old one?

 

7. Make a list of your personal spending

 

Keep track of where your money goes by making a list of every expenditure, no matter how little. Don't forget to always carry a small notebook with you where you can write down every single purchase for you to identify where your money is going.

 

8. Get rid of things you do not need, and turn them into money

 

Go through your stuff and decide which items you need and which ones you don't. Maybe you can sell the items you do not need on eBay and use the money to help pay off your debts. Once you get comfortable on eBay, maybe you can earn extra income on a regular basis.  Many people do, you know.

 

9. Live within your means

 

Do not spend more money than you make because doing so will put you in a big financial rut. Be a wise spender -- always be aware of how much you actually have left so that you will know how much you can afford to spend.  Remember a credit card should not be considered an extension of your income.

 

10. Set long-term goals

 

Think of what you want to attain in the future, and base every financial decision you will make on that. What is more important?  Building security for your family and retirement, or a fancy car to keep up with the Joneses that depreciates as soon as it leaves the showroom floor?

 

The key to a debt free lifestyle is to keep track, know how to manage your finances, and resist temptation. Always make sure that as days pass by, you're getting rid of your debts, no matter how slow your progress is.

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