Get in Control of Your Debt!

I remember back several years ago, my wife and I were in the process of moving. We had great jobs making a considerable bit of money. I had no doubt that I was living the American Dream! Qualifying for a home loan was going to be so easy or so I thought! See despite making great money my wife and I fell into the trap that so many other people do. We were on a never ending spending spree with no real idea exactly how much we were spending. I did not realize at the time that our debt had mounted at an alarming rate. See, despite making all kinds of money my wife and I had a very low credit score due to our high debt. Sure we were making our monthly payments but our debt to income ratio which is directly tied to your fico credit score was way to close!

So here was what we learned. It is extremely important that you know where your money is going each month. Most of us have no clue when, where and what we spend our money on. The surest way to know is to start a daily debt journal. This journal will be a real eye opener to what your spending habits are. So here is the game plan!

1. For one month, write down every cent you spend. I do mean EVERYTHING! Pack of gum, gas for the car, credit card bills, groceries, that Starbucks coffee, rent or mortgage...EVERYTHING!

2. Use a monthly expenditure sheet and list each and every item from your journal onto your sheet. You will now know exactly where your money is going. If you do not have one you can use the sheet available on our website at www.NoDebtUniversity.com

3. On the same monthly expenditure sheet list your monthly net income. This is the amount of money your actually bring home after taxes and other deductions.

4. Breakdown each line cost and to determine which items you can eliminate or cut back on. You will discover EXACTLY where you can reduce your spending without truly impacting your day to day life.

5. Attack your existing debt with your new found money! Understand this is a key component to controlling your debt but there is much more you can do to speed up the process of gaining control. Continue your debt elimination education. Trust me learning more about your debt will save you tens and even hundreds of thousands in your lifetime!