How To Do It Financially

By: Martin Lukac
Submitted: 2007-01-17 16:17:29
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We've all probably wondered how other people do it. I know that I do. According to the reports, a lot of people do "it" -- have everything they want -- by adding to their debt level via credit cards and loans. But there are people out there that are getting by in other ways.

Yes, being frugal isn't always the glamorous thing. But it allows a parent to stay home and raise the kids. It allows you to save for retirement. It allows you to spend money on the things you want to buy, instead of on little things that add up over time, or should I say subtract over time.

In order to make it, sometimes you simply have to make some sacrifices. There are many ways that people are getting by without using credit cards. Most of them simply take a little thought.

Start with watching your purchases. Even the small ones. These are the ones that add up before you know it and subtract from your bottom line. Try tracking every cent you spend for a whole month. Right down to the coffee and chewing gum.

You may have never noticed that the latte every morning is costing you $40 a month. Have you ever thought about how much your lunch costs you every day? Wouldn't you rather take your own lunch and put that $100-$200 towards something you want? Or better yet, invest it and watch it grow.

Most people don't realize how flexible they can really be. Look at your groceries for example. There are many ways to save money when it comes to putting food on the table. You shop sales, you use up your leftovers and you make more from scratch. You can cut quite a bit out of your grocery bill by just eliminating junk food and sodas. Hey, that will help you lose weight and be healthier as well.

The second way to do it is one of the hardest in today's world. You have to learn to live within your means. This sounds easy, but it isn't. I know that there are so many things that you want. Everywhere you look, society is showing you something you need to buy. But believe me, keeping your wants in check will keep you within your means.

Start with forming a family budget. If you don't do well with a standard budget method, experiment a bit to find out what works for you. My family uses a written budget to manage our monthly bills and savings goals and then we use an envelope method for gasoline, entertainment, groceries and eating out. Remember, budgets aren't written in stone. They are meant to be adapted over time. They constantly change. And your budget shouldn't be like anyone else's -- your finances aren't.

Living within your means requires that you get out of debt. When you are using credit cards, you are living outside of your means. You can't afford what you are buying. And the interest on those cards makes it hard to afford what you want to buy in the future. It is an endless circle of debt that often crashes down rather quickly. I don't care where you are in your credit card debt, you need to get rid of it. Even if you don't owe much, someday you will if you don't stop right now. Believe me, I know. I've seen how they work time and time again. Credit cards are not good loans. They aren't good debt. They are there to make money off of you. A lot of money.

The way to keep on track with your finances is to set goals and priorities. If you know that getting out of debt is a main priority, it will be easier to not spend as much. But it isn't getting out of debt that will really motivate you, it is what your life will be like when you are out of debt. Take the time to figure out how much it would put back into your pocket each month. Look at what would happen if you invested that payment amount on those credit cards in a mutual fund that gave you an average of 10% annually for ten years. Believe me, money is the incentive to not spend.

Keep your goals in the front of your mind every time you make a financial decision. That is how you can really do it. Because those that are doing it other ways are only doing it for now. You can do it for the rest of your life. Just think before you spend.

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