You can take control of your debts

A simple way to find “extra” money to pay down debt is to track expenditures.

Stacks of change -- pennies, nickels, dimesDo you have too much credit card debt?  Is most of your paycheck gone before it even arrives in your checking account?  Can you find extra dollars to help pay down your debts?  Keeping track of your spending can help you find some extra money to gradually pay down your debts.

Here’s how Michigan State University Extension suggests you start:  Keep receipts for all money that is spent by all members in the family.  If you spend money on an item or service and did not receive a receipt, make your own on a small piece of paper.  At the end of each day, make an itemized list of all the expenditures from the day. 

This is a difficult habit to start; getting the entire family on board or a friend who will also track his/her expenditures can help as you remind each other to keep your receipts.  Other ideas to help remember to keep track of spending include:  put sticky notes around the house with reminders such as on the door, on a mirror, on the refrigerator, on the dash in the car, etc.  Take advantage of automatic reminders provided by electronic calendars such as Google or Outlook.  Set an alarm for each evening on your alarm clock to remind yourself to write down your spending for the day. 

Find a convenient and easily seen location to keep all of your receipts such as a basket on the kitchen counter, or a can or a small box.  By making the daily list of itemized expenditures, you can organize your expenditures into categories such as utilities, mortgage or rent payment, meals on the go, snacks or beverages purchased, food purchased at the grocery store, medical, prescriptions, gas for the car, clothing, entertainment, tobacco, alcohol, gambling, etc.  After you have recorded your daily spending, put the receipts in another file labeled receipts.

Try to keep track of your spending for at least a month.  This might seem like a long time, but you will get a better picture of where your money is going if you can track it for that long. 

Now you can look and see exactly where you spent your money.  Look for ways where you could save money on these expenditures such as taking a lunch to work instead of purchasing a meal while you are out, bring soda from home, filling a insulated refillable bottle with water from home.  Add up all of the dollars you can save in this way. 

Apply the extra money to the regular payment for selected debts each month such as $25 extra plus your regular $100 car payment.  When that debt is paid off, put the extra money plus the payment you would have made on the paid-off debt to another debt.  You can use a website such as ““Power Pay”  to see how this will help you pay off your debts. 

Start tracking your expenses and take the first step towards living debt free today.  There are many additional resources on personal finance at the MSU Extension website.

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