My son gave us a book for Christmas: The Total Money Makeover by Dave Ramsey. Robert is a big fan of Dave's- reads his books, listens to his radio show. Robert's financial decision-making process frequently includes the phrase "what would Dave do?" It's all good. Regardless of what philosophy you ascribe to, just being aware of your financial position is a good thing. However, I've found Dave's approach to be especially practical because it deals with real issues faced by real people and proposes real solutions. Oh, the solutions aren't always easy. Dave is fond of saying "sell..." whatever it is that is costing too much money. Or get a better job. Or get another job and pay off those debts.
I've been examining my own finances lately and discovered that little things can add up. When I stopped drinking sodas it not only improved my health, but saved me some money each day. When Gary changed his job and we stopped eating out so often, it saved us money. When I started questioning each purchase instead of just blindly buying something "on sale", I saved money.
Now I just have to remind myself that saved money needs to be applied to debt. Any windfall, increase, gift, or extra earnings needs to be applied to our debt...until it's gone. I've seen several websites and blogs lately that are devoted to the concept of being debt-free. Most concentrate on credit cards, others include car payments and even mortgage payments. I'm not going to worry about how far we can go with the concept. I just want to start traveling in the right direction!
We're given a totally different message by the media: spend, spend, spend so our economy will thrive. Well, that's all fine, unless we are spending money we don't have. And that's essentially what credit is doing for us- allowing us to spend money we don't have, in hopes that we will have it in the future. I don't know about you, but my future keeps changing in unexpected ways. Our expenses have gone up and our income has gone down. That's not exactly what we planned!
Debt-free seems like a reasonable goal after reading Dave's book. I may have to re-read it a few times to stay on track, but nothing worth doing is ever easy.