About 4 months ago, I realized that my spending/saving ratio was amiss. Furthermore, I couldn't tell whether or not I was paying down my Amex cards because I dont pay attention. I headed over to Staples and got myself a ledger and wrote down all my bills and how much I pay each month. It was from that day, that I put into practice a few things to help me save and pay down my debt:
1. Automate my direct deposit to my savings account.
2. Write down all my bills, and how much I paid each month.
3. Use a payoff debt calculator at bankrate to figure out how much money I need to pay each month to my highest rate credit card.
4. Sign up to Mint.com to help monitor my personal spending.
5. Stopped using the credit cards.
#5 was not hard for me, because I barely used my credit cards, but when I did, it was in bulk amounts that kept building on y carried debt. Signing up for mint was also helpful, because I saw that I spent $700 in shopping per month. Since I've been committed to paying off debt and saving, my shopping habits have changed.
Now, I go to websites and scoff at paying more than $30 for a shirt. I went to the mall this week and bought an orange sweater for $43. It didn't sit right with me, and I went to Gap and saw an orange sweater for $22. I bought it and returned the other one. That's how cheap I've become. The old me would have insisted on the first sweater because it was more my style. But at the end of the day, orange is orange and a cardigan is a cardigan. Why pay more?
Paying off debt requires a lot of discipline. It means giving up some luxuries, but the end result is the big payoff. I will have one of my credit cards paid off in a couple months, which will put me that much closer to saving that money towards a house.