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Step 1
Set goals and get intense about them. List on paper what you want to achieve financially. Include short-term goals like a vacation or a new car, and long-term goals the kids' college fund, a second home and your retirement. Take charge and commit to a plan for your money.
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Step 2
Create a detailed, written budget. Include all household expenses, including utilities, rent or mortgage payments, insurance, groceries, clothing, entertainment and savings, as well as expenses that vary from month to month. Take the time to re-work and finetune your budget.
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Step 3
Spend every single dollar on paper before the month begins in what is called "zero-based budgeting." Make a new budget each month to reflect variable expenses such as gifts, annual dues or subscription fees.
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Step 4
Stop using credit cards. Create a plan to pay off any outstanding balances, making larger payments on the account with the smallest balance until it's paid off. Move then to the next balance and do the same thing and continue until all credit card debt is cleared.
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Step 5
Start saving for a rainy day. Put a set amount of money in savings each payday until you have at least $1000 for automotive or medical emergencies.
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Step 6
Keep a binder with records of monthly budgets, spending, savings and your debt reduction program. (See Resources for forms.) Review your progress every 90 days and adjust your plan if necessary.
