Despite the best of intentions and the clearest of budgets, sometimes holiday spending can snowball out of control. It can start with an innocent extra box of ornaments or a gift for someone not on your list, and before you know it, you’ve charged the entire month of December on your credit cards and you’re facing the New Year with bills you’re not sure how to pay.

Even if you have gone overboard this year, it doesn’t mean you have to spend all of 2012 digging yourself out of the hole. Here’s a step-by-step and (relatively) painless plan for paying off your holiday spending spree.

1. Transfer your credit card balance responsibly. To avoid having to pay interest on your purchases, look into transferring what you owe to a 0% balance transfer credit card. This will give you a little breathing room to pay off your holiday excess—the transfer term is sometimes as long as year or more.

You will generally face a nominal transfer fee of around 3% of the balance, but that will still save you a great deal of money compared to your interest rate, provided you can pay the balance off before the 0% introductory rate expires. As always, make sure that you use this transfer along with a payoff plan (step 2) in order to keep yourself afloat. If you’re not sure about your ability to handle the temptation of a new credit card, then skip right to step 2.

2. Create a payoff plan. With your budget (you do have a budget, right?) and a calendar in hand, determine exactly how much you can send to your credit card each month or with each paycheck. If possible, set up automatic payments to the credit card for the day you receive your paycheck so you don’t even have to think about it. And to keep yourself motivated, start a debt payoff thermometer on a whiteboard or online. (Online thermometers are generally created for fundraisers, but they work just as well for debt payoff). A visual of how far you have come and where you still need to go will help you to remember the big picture when temptation strikes.

3. Find extra ways to make money. Even with a period of 0% interest and a payoff plan, a truly epic spending hangover may still take some time to recover from. If you want to make sure that this lapse in judgment affects as little of your New Year as possible, here are some ways to “find” extra money to send to the debt:

Go on a Financial Fast in January

Just as you might want to refrain from drinking for a while after an all night binge, you might also want to put the kibosh on your spending for some time after the holidays. Basically, you will choose a certain amount of time during which you will refrain from spending any money outside of absolute necessities. It’s very important to be brutal with the definition of a necessity. For example, you can eat through the food you have in your pantry, rather than go to the grocery store during your fast.

Michelle Singletary of The Washington Post recommends committing to at least a 21 day fast in order to see the best results. And after a month of excess, it will feel great to know just how little you need to spend in a month.

Sell Your Gifts

We all receive gifts that aren’t quite right. It may feel strange, but there’s nothing wrong with selling your gifts and gift cards on sites like Ebay and www.giftcardgranny.com. It means that the gift will truly be appreciated and that you can feel more financially comfortable. Just make sure you sincerely thank the giver. They are, after all, giving you an opportunity to get your financial ducks in a row, even if that’s not the gift they intended to give you.

Earn More Money

While there’s only so many ways you can cut your spending, your earning potential is virtually limitless. If you’re still not sure how you can pay off your debt quickly, try to find a second income stream that you can send directly to your credit card. If you find something that you really enjoy doing, you’ll be spending your time more wisely, as well.

The Bottom Line

We all make mistakes, particularly when temptations are around every cheery holiday corner. The bigger mistake would be to ignore the problem and let it get out of hand without dealing with it. Don’t start your 2012 in the shadow of your poor 2011 decisions. Take charge of your finances and make sure your New Year is a great one.

Emily Guy Birken is a freelance writer and regular contributor to PTMoney: Personal Finance. She lives in Lafayette, Indiana, with her mechanical engineer husband and infant son. Her musings on life, parenting and money can be found at The SAHMnambulist and Live Like a Mensch.

photo credit: faster panda kill kill

My family and friends can’t stand going shopping with me. I used to be easily influenced into buying anything. Now I simply don’t want to buy anything. I’m the worst person to go shopping with now. I second guess every purchase. If I do end up buying something, I ask myself, “what will I get rid of now?” You know, the one in and one out policy. I don’t like to fill up my place with stuff, I would rather experience more.

With Christmas right around the corner we’re all shopping and the malls are jam packed. It’s too tempting to bust out the credit card and buy that perfect Christmas gift for that person on your list. Financially gluttony is way too common around this time of the year. I could go in the direction of racking up massive amounts of credit card debt by buying stuff, but I’m going to go in a different direction. I wanted to get into the actual stuff that we buy. I wanted to focus on what happens with all of the things that we spend our money on.

Is your stuff owning you? How can you tell? Let’s look at a few warning signs when it comes to letting your stuff take over your life:

You can’t get rid of anything.

This is a serious problem. Hoarding is very addictive and there can be no boundaries. Once you start to hoard it’s going to be difficult to stop. You’re going to want to hold on to everything. We all know someone that has a home filled with stuff from the 70s that they really don’t need any more. If you find yourself unable to get rid of anything, this is a sign that your stuff is taking over!

You have no space in your home.

If you can barely get around your place because of all of the stuff, then it’s definitely time to let go of a few things. Stuff is clutter and clutter sucks. There’s no other way to put it. I once rented out a mini disposal bin from a friend and got rid of a whole garage full of stuff. What’s the point of a garage (or basement or spare room) if it’s unusable because there’s too much crap in it? When you have no space this means that you got way too much stuff.

It feels like you never have enough.

When you can never have enough stuff, you’re letting your stuff take over. There’s always an excuse to get more stuff. If you feel like you don’t have enough you’re going to keep on accumulating more and more stuff until you can even find your bed in the room. If you can never have enough, it’s time to break loose of your stuff.

I hope I didn’t scare you hoarders away just yet. What if you’ve noticed some of these warning signs? Is there a solution? Of course there is. There’s no need to stress because you can easily get over this little love affair with stuff. How can you break free from your stuff?

Sell your crap for money.

This is the most obvious solution to dealing with stuff. Since there’s a monetary value behind all of our stuff it makes it difficult to just throw it out. Instead of throwing it out, you can always sell it. As they say, “one man’s trash is is another man’s treasure.” There are many theories and techniques on the Internet when it comes to selling stuff. Mine is simple.

Go on Kijiji, put up an ad, and wait for the responses. If you don’t get any then re-post the ad on a few other similar sites. I’ve always found success with selling my stuff on Kijiji. Just throw something on there RIGHT NOW and see what happens.

Done your stuff to charity.

If you can’t sell your stuff or just can’t get rid of it, then you can always donate it to charity. This is what I started doing with my clothes. I purge my wardrobe every few months. As time goes on, my style changes and as does my size. I work out often so I have plenty of clothes that doesn’t fit. I either give it to my friends or donate it to charity. Clothing is meant to be worn. Not sit in a closet.

Try to experience something cool.

I find that one of the main reasons that we all spend so much of our money and time on stuff is that we don’t know what it’s like to spend money and time on cool experiences. In the last few years I started to go on more trips, look for more unique experiences, and experience more in life. Before I started spending my money on experiences I would just random buy arbitrary crap. When I started to travel I learned that there was so much more to life.

At the end of the day, it’s perfectly normal to be a hoarder. The good news is that you can break free of this habit easily!

Are you ready to break free from your stuff? Let 2012 be the year where you become clutter free.

This was a guest post from Martin of Studenomics, a fun blog aimed at helping you figure out what to do after college and how to find the best credit card for students. If you want to invest your hard earned money you can learn about screening tenants to protect your rental property.

photo credit: justinpickard

This post provided by Money Supermarket.

People have often been told that investing in a home is the best thing they can do. In the recent financial crisis many people have found this not to be true. The reason for this is that so many lenders gave loans to people who were simply not qualified to carry the kind of mortgage payments that were required. Many people bought homes that were out of their price range but were lulled by easy loans with very little or no down payment required.

There were lenders giving loans for bad credit that should never have been approved in the first place. While owning a home is still a good choice it should not be considered as the sole investment vehicle. Housing prices can go down as has been proven in the last few years.

Only buy the kind of home you can reasonably afford to make payments on and never be lulled into signing loans for bad credit that are ultimately not sustainable for your budget.

Getting Your Credit Score

Obtaining a credit card has often been viewed as a bad thing. Many financial advisers told their clients to always pay cash and to never carry debt of any form. While it is never a good idea to be drowning in debt, a little debt can actually be useful. Credit cards can give you a credit score. When you make regular payments your credit score goes up. As a result of this it is easy to obtain loans for cars and mortgages that offer a good interest rate. If you have never had a history of credit and pay for cash with everything, then it may be very difficult to obtain a loan when the time comes.

Lenders want to see a history of consistent payments whether it is for a student loan or a credit card, so they know you are a good credit risk. Speaking of student loans, it has been advised in the past to take out the biggest loan and invest in the best possible school. This leaves graduates with huge student loans that can take decades to repay. It is far better to go to a modestly priced school and only obtain a small loan, while supplementing this with a part-time job.

How To Get Rid of High Interest

People have been advised to never take money out of their 401(k). Now it is thought that using this type of loan is actually very useful when it is used to pay off high interest credit cards. Paying off high interest rate debt faster is one of the best things anyone can do for their finances. If you know the rules for taking out a 401(k) loan and have a plan to pay the money back, it can make financial sense.

Using home equity loans for paying off credit cards has been advocated by many. This can make sense since credit card interest is usually much higher than home equity rates. It can also make people more vulnerable to carry debt as a lifestyle. It can leave individuals more open to bankruptcy and foreclosure too. Paying off high interest rate credit cards is important but as already pointed out in the article, there are other ways to do this.

My husband and I recently added up our student loan and credit card debt, and we were shocked at the figure–$58,000!  What was this debt comprised of?  It is made up of nearly $38,000 in student loans, $6,500 on a business credit card for a business that failed and $13,500 of personal credit card debt spread over two cards (the smallest balance at $1,000), largely due to our current low income and some not so wise purchases.

What Gazelle Intense Looks Like for Us

At the urging of everyone around us, we began to follow Dave Ramsey.  Because we do not yet own a house but would like to in the next 3 to 5 years, we decided to become Gazelle Intense, as Dave Ramsey says.  What does gazelle intense look like for us?  My husband is gone to work and away from the house for 10 hours a day.  After spending an hour with the kids when he comes home, he works on his dissertation and articles for publication for a few hours a night.  I stay home with the kids all day and blog, do virtual assistant work and freelance writing when the kids are napping and after they go to bed.  On the weekend, I typically leave the house for about 4 hours on both Saturday and Sunday to get more freelance work done.  I estimate that I am working 25 hours a week from home, and my husband is putting in another 20 hours a week at home doing work that will further his career and hopefully lead to a high paying, tenure track job in a few years.

Gazelle Intensity Works!

Our hard work is paying off.  In just two weeks, we “found” an additional $701 to apply to our debt beyond our regular debt repayment schedule, and we just paid off our first credit card with the lowest balance.  We plan to pay off the credit card with $6,500 within the next 4 weeks.

As anyone who has become Gazelle Intense knows, there is a period of adjustment when getting used to the austere lifestyle that is required.  Let’s be honest—most people who have credit card debt have at least some of it because of a lack of impulse control and planning.  Was all of our credit card debt due to that?  No, we had a very low income for awhile, and we relied on credit to make ends meet.  However, we also ate out more than we needed to.  (Do you ever need to eat out?)  Our debt now is higher than it might have been had we been more stringent with ourselves and our finances.

How to Maintain Gazelle Intensity for Months (and Years)

Because there is such an adjustment, to maintain your gazelle intensity and avoid frugal fatigue, consider rewarding yourself for each debt that you pay off or at a milestone you set.  If you have one large debt to pay off, maybe you will reward yourself for every $5,000 you pay off.  For us, since we love to eat out and now no longer eat out at all, we have decided that we will have one meal out every time we pay off a debt.  To maintain your drive, pick one thing you used to enjoy spending money on in your old, less frugal lifestyle, and commit to enjoying that activity once when you achieve your assigned goal in your debt snowball.  Keep it reasonable, less than $50, so you don’t derail your snowball, but give yourself that leeway to maintain your intensity.

Being gazelle intense definitely has rewards—put yourself in a painful place for an intense while until the debt is paid off, then, begin to reap the rewards of all your hard work by living like no one else, as Dave Ramsey says.  Yet, be careful not to become so strict with yourself that you give in to frugal fatigue and derail your debt snowball.  A small, planned out treat is often all it takes to keep you motivated and ultimately debt free.

photo credit: Paul Mannix

Many of us have heard of debt consolidation loans.  Some of you might have even used one before.  They’ve gotten a bit of a bad rap over the last few years because they get associated with debt consolidation companies, some of which can be a bit shady.  But, they aren’t all bad.  And, in some cases, they can be a very useful tool in your debt repayment strategy.

Debt Consolidation Loans: What Are They?

The concept is actually pretty easy to grasp.  As the name implies, a debt consolidation loan is a loan that consolidates all of your other debt and puts it all under one single loan.    Depending on the lender, you can consolidate just about any debt.  We’ll talk about some of the things you might not want to consolidate in later.  For many, the prospect of trading their high interest credit card debt for a lower interest rate loan can be very enticing.

Debt Consolidation Loans: When Should They Be Used?

While you can get a consolidation loan at any time, there are a few times when they are of the most use.  The most common of these is when you have several credit cards that have high balances and higher interest rates.  As we all know, paying only minimum payments won’t get us very far, but having several cards to pay sometimes leaves us with little left over to pay extra towards those balances.  A consolidation loan can reduce the interest rate, and reduce the payment amount, making it easier to pay extra on the balance. One of the biggest factors to determining if you should use a consolidation loan is your resolve to stay off the debt treadmill.  If you can’t commit to not adding any more debt, you’ll only find yourself worse off in the long run.

Debt Consolidation Loans: Why Should They Be Used?

A debt consolidation loan can be a great tool when you’re working on paying off your debt.  The reduction in interest rates and payments can help ease the burden of your debt while also enabling you to pay off the debt at a quicker rate.  Again, if you aren’t committed to not adding any more debt, and you start using those same credit cards again, you’ll find yourself in a much worse situation than you were before.  Combined with a commitment to no more debt, they are a great tool.

Debt Consolidation Loans: Caveats

With anything, there are a few things that you’ll need to watch out for.  Besides reloading your credit cards, that is.  Some lenders will attempt to roll a car loan or a home equity loan into the consolidation loan.  Only do that if there is no other option.  Why?  Both the car loan and the home equity loan are what are called secured loans.  There is some physical asset that the lender holds title to should you default.  If you roll either into the consolidation loan, you don’t own that physical asset until the consolidation loan is paid off.  Consider this example.  You have a car loan for $5000, on a car that has a value of $10000.  You roll that car loan into your consolidation loan along with $20000 in credit card debt.  The total for your consolidation loan is then $25000.  Until you pay that $25000 off, the lender will keep it’s lien on the car.  What if you get in a wreck and total the car?  You can’t use it as a trade-in, or sell it to a salvage yard until that $25000 is paid off and you can get the lien removed from the car.  It’s a hairy situation to be in, to be sure.  All that said, getting an unsecured loan can sometimes be difficult, and depending on your situation, some lenders might require at least part of the loan be secured.  You’ll have to determine if that’s a risk you want to take in order to take ownership of your finances.

Much like any other financial tool, a debt consolidation loan can be helpful under the right circumstances.  Be careful, examine the details, and learn how it works, and you can make sure that it remains that way.

photo credit: Vectorportal

I was reading a story somewhere where a person was being interviewed about their debt.  In the interview, the person was speaking about how they had this credit card debt and how they just couldn’t get out from under it because of all the interest, fees, and other ways that the credit card company throws on the heap each month.  They went on to talk about how they were in fear of having their car and house repossessed because they were falling behind.  With each new problem, they were quick to point out the things that were keeping them back and causing their slide into bankruptcy.

Something occurred to me, then.  They were taking no ownership in their finances.  No matter what the financial woe was, it was always someone elses fault.  The credit card companies were tacking on interest and fees.  The bank was adding late charges onto their car loan and mortgages.  Not once did they take any ownership of their situation.  Not once did they say, “we shouldn’t have charged so much on the credit cards”, or “we bought more house than we could afford”. The blame was always on the other guy.

If there’s one thing I’ve learned in my journey towards beating broke, it’s that it’s all my fault.  I signed that credit slip.  I signed that mortgage.  I signed the loan papers.  Yes, some of the credit card companies have interest rates and policies that border on predatory.  Yes, the banks will allow you to borrow right up to a point where you’re living paycheck to paycheck.  But, I signed on the dotted line.  Along the way, I discovered all of that, and I took financial ownership.  And, in doing so, I took control.

Through financial ownership, I have control over where my money goes.  I have control over which debt gets paid off first.  I have control of how tightly the purse-strings are held.  And, most importantly, I have control of my financial future.  A future that I plan to make as financially independent as possible.  Not at the whim and mercy of any bank, but a future where I can plan to buy things, and save money towards retirement.

My journey isn’t over, but I am beating broke.  I’m taking financial ownership and making my future one that is free from broke.

I want you be able to say the same thing.  It’s one of my goals for this site to help you beat broke.  Beating broke is the first step in your financial journey towards a life free from concerns over where next months bills are coming from.  You can do it.  But, you’ve got to take financial ownership.  You got yourself in the situation you’re in, and only you can get yourself out.  Do it today.  Accept that you are the only one that can take ownership of your financial situation, and you are the only one with the power to fix it.  Take that step.

photo credit: woodleywonderworks

According to a new report by the American Express Spending and Saving Tracker, 15% of the American citizens plan to augment their savings in 2011; as compared to a poll in 2010 and 40% say there will be no changes in their spending behavior this year. Are the Americans planning to spend more dollars in 2011? How could this be? Aren’t the Americans amidst a sluggish economic recovery? With the spurring unemployment rate and the debt deficit, people are having less cash flow in their hands and this is restraining them from paying off their debt obligations on time. They are resorting to debt consolidation as an option to simplify and accelerate their debt repayment procedure. In the previous year (2010), the Americans planned to save an average of $14,000, but in 2011, they aim to save only $2700. While some might view this consumer behavior as a sign that US economy is emerging strong from the global recession, but most sensible people know that America is treading on the path of a double-dip recession.

The rule of the thumb is to have enough savings to cover your expenses in case you lose your job or any other financial emergency occurs. It is a common belief that a penny saved is a penny earned and not leading a frugal life within your means can push you deeper into the vicious cycle of credit card debt. The present personal savings in the US stands just under 6%, a rate that is much higher than what we saw in 2007 when the economy was booming and financial experts are of the opinion that this personal savings rate needs to stay throughout 2011 in order to forget the financial horrors.

Pinching your pennies – Steps to go about this way and build wealth in 2011

Benjamin Franklin had mentioned that ‘a penny saved is a penny earned’ and the statement is just as true today as it was then. Creating a savings account is mandatory for those who are looking for ways to secure financial freedom. Here are some penny pinching hints that can help you build your wealth and reach those not-so-lofty financial goals.

• An emergency savings account – Either start it or boost it — The biggest thing that bars the Americans from saving money is not being in the habit of saving. America has been unanimously acknowledged as the nation of spenders and by not boosting their savings, they’re just living up to this name. The best way to get into the habit of saving your dollars is by paying yourself directly by depositing money into your savings account from your paycheck account and this can be done concurrently with your other goals of paying down debt. If you want to reinforce your habit of saving money, make sure you put your savings on autopilot so that you have enough funds when unexpected expenses inevitably come along.
• Track your monthly spending – Stop hating the B-word — Americans love to hate the B-word, budgeting but according to most financial experts budgeting is the finest way of saving money and building wealth. By budgeting you can keep a track on the areas where you can cut back your expenses to maximize your penny-pinching efforts. Use this information to create a solid monthly spending plan and don’t over do it. Make sure you tally your expenses at the end of the month so that you know where you did well and where you didn’t.
• Pay down high interest credit card debts – Live debt free — For most households in the US, the best way to boost the return on your money is by paying down high interest credit card debt. Whether you’re carrying balances at 12% or 22% interest rate, credit card debt is the costliest debt that most households carry. Plow excess cash into repaying your high interest debt as this is a risk free return of your money. You can save thousands of dollars on resulting interest charges and outstanding balance. Get professional help from debt consolidation companies if you find it impossible to tackle them on your own.
• Contribute to your workplace retirement program – Begin or increase it — Though there are many employers who have suspended or scaled back their matching contributions, yet this must not be a reason to stop yours too. Make sure you contribute a part of your monthly income to the 401(k) retirement account as this will not only reduce your present taxable income but your investment will also grow without the headwind of taxes. Withdrawals during retirement will not be taxed and thus you can keep your nest-egg intact.

The next time someone tells you not to worry about spending money as you’re helping the economy, thing twice. If you’re still having problem convincing yourself to save money, just consider the financial mess your country is facing, more than $14 trillion debt and a weakening dollar. Help the economy get back on track by saving money and building wealth. Repay your creditors and get help from professional debt consolidation services to avert the risk of yet another recession.

Ryan Smith is a contributory writer associated with http://www.debtcc.com and has written several articles for various financial websites. He holds his expertise in the Debt industry and has made significant contribution through his various articles.

photo credit: MikeParker

Although bankruptcy has turned into a serious possibility even for the most frugal of households, it has sadly retained its social stigma: Not only will entering into insolvency mean you’re no longer in full control of your finances, it may also make it harder or downright impossible for you to find a new job or apply for a loan. With over 20 percent of Britons close to the point of being unable to pay for their daily needs, many are looking for more individual options to reduce their debt. This why an IVA, as an alternative to bankruptcy, has become increasingly attractive to more and more households in the UK and why they actually outnumbered insolvencies in the first quarter of 2011. Surely, you have heard the term IVA being mentioned in the media, but what exactly is an Individual Voluntary Agreement and what does it offer to those in search of debt help?

In short, an IVA is a new legal tool designed to offset the disadvantages of debt management plans and insolvencies. By providing a framework of binding rules between a debtor and his or her creditors, an IVA makes sense in those cases, when a debtor is not actually unwilling to pay off his debt, but merely incapable of paying it back fully or within the initially specified amount of time. Practically speaking, it constitutes a renegotiation of your debts and fixes a new schedule for their repayment. At the end of a successful IVA; not only will you have avoided the disadvantages of a regular bankruptcy and sorted out your finances. But your creditors will, with all likelihood, also have received a larger share of their outstanding money than in case of an insolvency. This double bonus means that in many cases, all sides have something gain with an Individual Voluntary Agreement.

There is a clear procedure to an IVA, as specified by the Insolvency Act, and it begins with you laying out a formal proposal to your creditors, in which you pledge to pay all or part of your debts, but under different conditions – you may, for example, ask for the repayment to be deferred or postponed. If the creditors agree to the proposal, it will become legally binding and generally run for a period of five years. At its conclusion, your outstanding debt (if there is any) will be written off.

As great as this sounds, though, an IVA is by no means a carte blanche. It requires a careful analysis of alternative options at the outset as well as professional support in its execution at all stages of the IVA procedure. Drafting an IVA proposal alone, for example, is subject to a plethora of technical details and best left to <IVA specialists with a profound understanding of how the procedure woks.

The Debt Advisory Line are an award-winning debt management company with years of experience in the field of IVAs. We can provide you with the assistance you need to make your Individual Voluntary Agreement a success. Get IVA advice from one of specialists by completing our IVA form now.

Photo Credit: Stargazer95050, on Flickr

Not to be confused with the scales that our friend Lady Justice carries around with her everywhere, the scales of finance are a bit different in function.  To truly weigh something, using a scale, you load up one side of the scale with that which you want to weigh and then put weights of a known mass on the other side.  When the scale is balanced, you count up the known mass weights and you’ve got the weight of the item(s) on the other side.  Lady Justice, as the story goes, does this by weighing a persons crimes and adding the appropriate amount of punishment to the other side so that the Scales of Justice balance.

When we think about personal finance, there are those that are die-hard frugalers.  There is no other way to save money, retire comfortably, or live, than by being frugal.  The more frugal you are, the more you save, and the less you spend.  Coupons are their best friends, as are black friday deals and places like farmers markets and flea markets.

There are also those that are the die-hard incomers.  Skipping a latte isn’t for them.  The only way to get ahead is to make more money while not spending any more.  They’ll work three jobs to achieve levels of income that were previously unheard of and use that added income to pay off debt and save for retirement.

But, much like justice, the scale can pretty easily be tipped into unbalance.  Frugaling, while a good idea, can only take you so far.  Income increasing can only take you so far.  Eventually, you’ll need to make a bit more money, or work less.  The right way to do it is to strike a balance between the two.  Cut your costs as much as you can, without going to extremes.  Increase your income as much as you can, without going to extremes.  Find a place where you can balance your financial life while still getting to live life and not be classified as a cheapskate work-a-holic.

Balancing the Scales of Finance

• Create a budget. Know where your money is going (even if it’s going down the drain), and plan where you want it to go.
• Cut costs. A little bit of frugal living isn’t going to hurt you.  Drop cable T.V.  You can replace it with Netflix, or books.  Find other things that you can do without completely or cut usage of.
• Analyze your finances. Use your budget to determine the inflow/outflow of your finances.  How long to payoff your debts?  Could it be accelerated greatly by taking on a second job?  Maybe you only need a second job for 6 months to pay off a credit card.
• Increase your income. There are other ways, besides taking on extra jobs, to increase your income.  Prepare for, and then ask for a raise.  Sell off stuff you no longer use.  Find a way to get paid for hobbies you already do.
• Don’t over-do it. Maintain focus on your end goal, but keep your sacrifices to a bearable level.  All that extra income won’t do you any good if you burn out in 3 months because you’ve been working 80 hour weeks.  And all the frugal in the world won’t do you any good if you burn out in 3 months because you’ve been manually separating the plys on your TP.

Don’t think that just because you do all of this once, that you’ll remain in balance forever either.  At first, you will probably benefit from regular weekly or bi-weekly check-ups.  As you get more comfortable with it all, you might be able to do it once a month.  Much more infrequent than that and you’ll lose your focus and begin letting things slip.  If that happens, pick up where you left off and continue on.

As you continue on, the Scales of Finance will become easier to balance.  You’ll become better at it, and the scales will gain a little extra margin for error.  It may seem hard now, but it does get easier.  And, believe it or not, it can be fun.

Photo credit: Thatedeguy on Flickr

What motivates your finances? What is the purpose that drives you to reduce your debt and make more money?

For me, the one thing that keeps coming back when I ask myself those same questions is the idea of freedom. The start of my own personal finance revolution started with some realizations. I realized that the financial path I was on wasn’t getting me anywhere else but broke. I wasn’t going to hit the lottery or discover some miracle money maker that would make me a millionaire. But, that isn’t my purpose. It’s merely the keystone that sparked my current journey.

When I began my journey, I decided that I needed to learn how to handle my finances. The one name that kept reappearing in my reading was Dave Ramsey and his “Total Money Makeover” book. So, I bought it and read it. And, something he said in that book brought my true motivational factor to the front. Yes, I wanted to have less debt and make more money. But, what I really wanted, was freedom.

He spoke about being debt free and having the freedom to tell your boss to “take this job and shove it.” What a thought. So many of us have to go to work every day to make enough money to pay our bills. But, what if we minimized those bills and had the freedom to do whatever we wanted to do to make money?

That is what motivates me to remove myself from the debt treadmill, and join the select few who have the freedom to pick up and do something that they enjoy! What a freedom!

What about you? What really motivates you to become debt free?