For those of you who read my other blog, you know that I have spent the past week moving. This has been one of our hardest moves and we are only moving across the street. I am not sure why this has been so difficult, but it has. Last night I sat on my bathroom floor and wanted to give up. My husband came in and assured me that we were making progress and that we needed to keep going. He reminded me of the saying, “How do you eat an elephant? One bite at a time.” I just needed to stop looking at the big picture for a while and focus on doing the next thing. And eventually there will be no more “next things.”

I think I can relate this moving experience to many people’s financial experiences. I talk to people all the time who have debts so huge they are overwhelming. They cannot possibly see how they will ever be out of debt, let alone build up a savings, save for college, and save for retirement. Whether you are 25 or 55 it is not too late to change your financial situation. Last year we became debt free. Granted our debts were small ($11,000 owed to Sallie Mae) and our income is higher than the national average, but the principles are the same.

First, get started. You will never get out of debt if you don’t do something about it. You will probably never win the lottery, hit it big in Vegas, or inherit millions from your in-laws. You and your spouse (if you are married) need to agree that being debt free is the goal.

Write down all your debts. Many people do not like to do this because they don’t want to see on paper how much money they owe, but you won’t get out of debt unless you make it real. Write down the minimum payment for each debt, you don’t want to fall behind or be stuck with late fees.

Create a budget because you will fail without one. There are many budgets you can download from the internet. Dave Ramsey has one, Crown Financial has one, there are many available, just google budget worksheet.

After all the necessities have been taken care of in the budget, add your debts. Pick one debt to pay extra on first and pay the minimum payments on the rest. As a side note, cable, eating out, vacations, and boat payments are not necessities.

Live according to your budget. Think of your budget as a tool to help you reach your financial goals. Any successful business has a business plan that they follow, families need plans too.

That is all I have time to cover this week, I need to finish eating my elephant. Next week I will share in detail about how our family paid off $11,000 in four months.

For more frugal talk stop by Crystal’s blog.

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