Now that you know what you spend every month, it is time to see if you can really afford what you spend. Take a moment and go get your pay stubs for this month, any kind of work that you do on a regular basis that will add to you monthly income. You don’t want to add any money that you only receive once or every few months, like gifts from family or an inheritance or even that once in a while job you take just to make ends meet. If you can’t depend on it, then it is not regular income. I know that there are a few of you who work by the job and that your income is not the same every month. You are going to want to write an average amount for your monthly income. Don’t cheat. You want the numbers to be as accurate as possible.

We are going to use a 4 week month. This will allow you to get an extra month of paychecks a year.

If you have a positive number, that is a good thing. If you have a negative number, you are in trouble and may want to again seek Professional Financial Help.

My suggestion for those of you who are spending more than what they bring in, is that you go over the list from the How Deep Does Your Debt Pit Go? article and try to figure out what items you can cut back on or eliminate all together. Most people don’t need cable, or a cell phone, or the internet. Most people can cut out the amount of time they spend eating out or renting movies. If you can live without it, try to eliminate it from your life. You don’t have to go without it forever, just until you have your debt paid off and you can afford to have it in your life. You must do what you have to do to live within your means.

I have seen people trade in a new car that they just bought for a used car that they were able to buy free and clear for a couple of thousand dollars. It may mean you will have to pay a little more on car maintenance every month, but they didn’t have that car payment looming over their head all the time. I have seen other people sell their home and buy a smaller home that is more in their price range. Sometimes you must make sacrifices in order to put your family in a better position.

Take some time and look at what you spend each and every month. Start subtracting things that you don’t really need or can live without for a while. When all your debt is paid off, you will find that the sacrifices you made were worth the trouble.

Go back to the How to Eliminate Your Debt Page.

This entry was posted on Wednesday, August 8th, 2007 at 12:01 am and is filed under Eliminate Your Debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.