Across the country, there are hundreds of thousands of families fighting to stay afloat with their finances, living paycheck to paycheck wondering how they’re going to make it to the next paycheck.

Living with debt seems to be more common than we want to admit, and the fact is that the issue is not just about not having enough money to cover all the bills, it’s about the lack of financial literacy that clouds our judgment and our decisions about the money.

The good news is that simple debt-free living and learning about personal finance is easy and possible if you dedicate the time to learn, living a debt-free lifestyle is no longer a faraway dream, it’s something you can achieve!

Here are 5 simple strategies you can get started on before you even finish reading this article!

Develop a Budget and Stick to it!

The vast majority of people think that budgeting is hard, that the reason why they have no control over their finances is that developing a budget is hard.

A budget is simply a listing of all the money that you make/receive monthly such as from your job, side gigs, disability, stocks, etc., and your expenses such as utilities, groceries, insurance, etc.

Your budget doesn’t have to be complicated, you can start with just tracking how much money you’re spending monthly on different things by using your bank statement.

You can start tracking your expenses with a free budget template from Vertex42, which are Microsoft Excel files that you download to your computer and are very easy to use.

Or, you can download a monthly budget template from Mint.com to track your spending habits by month and be able to compare and measure your progress over time.

As a recent article from NerdWallet pointed out, “budgeting is a third-grade math problem.” So instead of struggling month after month without any idea of where your money is going, learn how to build a budget that works for your specific situation and is flexible enough for you.

You need to ask yourself, are you ready to follow your budget? Is it realistic and simple enough to get started? Most importantly, do you fully understand your budget and what it means? 

Learn More: LeanMoola Rants: Don’t Cheat On Your Budget!

Work to Become Debt Free

Another way that you can stay in control of your finances is to start working on getting rid of all your debt.

One of the first steps to becoming debt-free is to start with the debt that has the highest interest rates such as retail credit cards.

Obviously, your mortgage, student loans, and even car payment are long term debt which means most likely you won’t pay it off within a year, so instead focus on paying off other debt such as credit card debt, then keep paying off the next one until ALL your debt is paid off.

The sooner you pay off your debt, the sooner you can use that money to invest in your future and enjoy that money.

Organize your Finances

Creating a budget is just to track and compare how much you’re making versus how much you’re spending daily, weekly, or even monthly.

The magic really happens when you organize your finances and track what day of the month a bill is due, for how much, etc.

In my family, we have a monthly budgeting template that every month I review with my wife and we compare previous months to see if we met our goals for the month or not.

Your goal could be as simple as being able to send an additional $50 to the savings, or spend less on coffee.

We also use the app Mint to track our expenses so we know what bill is coming due and for how much, since we have all our bills connected to the app.

If you truly want to improve your finances and learn how to cut your monthly expenses, you need to organize all your finances to be able to track them and make informed decisions.

Most importantly, you need to know what bill is due, when, and whether you will have enough in the bank to cover them in order to avoid late fees and overdraw your account.

Avoid Overspending

We all tend to overspend here and there, some people more than others consistently every month.

The problem is that if you’re making $20/hour, and spend $200 over the weekend in dining out and shopping without realizing that it cost you a full day worth of work, you’re never going to appreciate your hard-earned dollars and you will keep overspending.

Use the envelope system to put aside money for the things you need, and avoid impulsive shopping for the things you don’t need.

The bottom line is, personal finance is about making decisions that either have a positive impact or a negative impact on your finances.

The decision ultimately falls on you, so have a plan in place and execute that plan.

Keep Track of your Credit Report

Your credit report is a good gauge of how you’re managing your finances from a high-level view, it can tell you things such as whether you pay your bills on time or not, or if you’re delinquent on any bills that maybe you never received in the mail.

You should check your credit score regularly, at least annually, to make sure what is being reported to the credit agencies is correct.

This is your chance to fix any issues that come up such as unpaid medical bills, that perhaps you already sent the money and they forgot to credit the money to your account.

Believe me, it happens a lot!

These things that appear on your credit report lower your credit score.

A lower credit score means that it cost you more money (as interest) to borrow a loan, or open accounts, or even in some cases, it could affect whether you get a job or not.

Becoming debt-free is hard, but is easier than you think once you decide to create a plan to get your finances back on track.

Although there is no short-term cure for your finances, there are creative ways to pay off debt, they just take time, patience, the willingness to learn and apply personal finance strategies that will help you improve your life.

***Do you know of any personal finance app like Mint for budgeting and money management? If so, please share in the comments below.

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