My Plan to live Debt-Free - Step 1 - Revisiting history

Revisit your history of spending.  This may take some time, but it is worth it.  Look at your bank and credit card statements.  How many times did you go to Starbucks?  How many shoes did you buy? How often did you go out for dinner?  How did you pay for it?  Did you use cash or credit?  When I did this.. I was amazed at the percentage of times I would use my credit card over cash.  It was NOT pretty. 

Below is the steps that will help you identify your spending.  You will need about 3 months of statements and a spreadsheet program. 

1) On one worksheet, list all your essential items - gas, food, mortgage and so forth.  These should be items that you need to exist.

2) On a new worksheet, list all your non-essential items - this would be entertainment, coffee, things that are considered a 'want'

3) Go back to each of the worksheet and creat two columns.  Cash / Credit.  Of note, cash is defined using our debit/check card or a check.  This is money that is directly deducted from your checking and or savings account.

4) Tally up how you paid for each item.

You will be AMAZED how many times we use our credit cards, with the intention of paying it off.  This doesn't always happen.  At least not with myself.  I found that just because I paid a minimum amount that I could use that.  What was killing me is that the interest would decrease the actual amount avaiable.  And I would find my credit card balances get larger and larger, and soon they were maxed out.  Not fun.

 So, I decided to take action and wage my own war.  After doing much research and reading - I came up with a plan.  So here we are.. stay tuned for Step 2.