Step 3-Spending Controls

How Spending Fits into Long-term Freedom from Debt

Living debt-free requires both self-discipline and a certain amount of luck. Perhaps better stated, you need to have the discipline to prepare your finances so you can weather life’s bouts of bad luck, such as job losses and medical emergencies.

We’ve helped hundreds of thousands of consumers pay off 100% of their debts that had come from overspending on credit cards. However, we’ve also helped similar numbers of consumers pay off debts that they incurred following divorces, hospitalizations, job losses, and other events they did not directly or, in many cases, even indirectly choose.

Now that you are debt-free and have committed in the previous lessons to saving (paying yourself first) and have set up a personal or household budget, your third key to debt-free living and surviving difficult financial times without going into debt will include setting up controls to manage your spending. Otherwise, living in a consumer society, we become much more likely to spend our money on impulses and splurges we did not plan for.

Basic Spending Barriers

Your basic spending barriers include:

  1. Setting up your financial accounts
  2. Separating your savings from your checking
  3. Matching the appropriate spending method (cash, debit, credit, online bill pay, direct debit, digital wallet, etc.) to your planned purchases
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