Page 128 - The Prosperous Way _ (APRIL 2024 v3)

THE PROSPEROUS WAY

you have to do to systematically reduce your debt is to get your day-to-
your spending is under control, throwing everything you have at your
debt is nothing but an exercise in absolute futility—the debt just grows
back again, more often larger than it was before. The first thing that
you have to do to systematically reduce your debt is to get your day-to-
day spending under control. The only effective tool I know by which to
do this is to record what you are spending your money on over an
extended period of time (I would say for at least 3 months and
thereafter, as needed from time to time to keep a check on your
spending).

I use an Excel spreadsheet to keep track of my budget, but you can use
something as simple as a notebook, or you can download an app to use
on your device. If you use cash, you can make sure to get a receipt for
everything you purchase, stuff it in your purse or wallet until you are
ready to record your spending. Then find a scheduled time to
consistently record your spending and plan how to lasso in any areas
that are out of control. It’s important to choose a time that works well
with your schedule to update your budget; whether weekly, bi-weekly
or even daily. At one time, I used to update my budget on the train ride
to work each day.

By recording your spending, you will be able to accurately identify your
spending “Achilles heel“ which is the area of vulnerability where
excessive spending is occurring. It might be that you are too
overcommitted by work or other obligations and so you don’t cook
regularly. So, this is where, after recording your spending, you head
down to the grocery store, get a rotisserie chicken and cut it up and
freeze it so you don’t have to buy lunches at work when you don’t have
time to cook. Or you might decide to dedicate a couple of hours on a
Sunday evening to cooking some simple meals for the week while you
listen to a podcast online or catch up on the phone with a friend. Once
you find where the hole is in your pocket then you can effectively
strategize how to mend it.

The point is that once you have a record of your spending habits and
have found that Achilles heel that is wreaking havoc in your budget,
deal with it! Don’t be in denial, identify the source of the income drain,
face it, work hard to contain and then completely tame that out-of-
control spending beast. It may not be easy, as it takes time to create new
habits. But determine to persevere until you see real change.

114