The excitement of the holiday season is behind us, and looming ahead is the credit card debt we managed to amass buying gifts for loved ones, treats for ourselves, and filling our busy social calendars. If you're trying to get back on top of your finances, you might just need a financial cleanse to clean out the cobwebs of unnecessary spending, mop up your debt, and start saving. Life without your daily latte (or three) might seem daunting as you contemplate the swift passage of time, but here are some tips from real people who have really done financial cleanses and lived to tell the tale:
"I like using simple things like Mint which do the categorizing for you, and which also allow you to set goals. I stuck to it, and was able to buy my dream car. I'm now using the "snowball" method to pay off my car loan in roughly 2 years to minimize interest paid." Michael*, 23, Software Developer.
"Examining our [hers and her husband's] spending habits and setting a budget was easy. The big benefit came from making a rough spending plan so that we can send something to a long term savings account via autodeposit. We made relatively little effort to reduce our consumption." Angela, Freelance Editor.
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"I did a complete overhaul on everything in my budget. Everything was examined. I changed my route to work to avoid tolls, reduced subscriptions, changed ISP's, dropped cable, changed alarm monitoring companies, stopped buying lunch at work. My advice; track every penny, plan ahead, be prepared to live like a hermit for a few months to go from using credit to using savings, push yourself, and don't give up." Hektor, 37, in the Navy.
"My wife and I annually do a 'no spend January'--nothing beyond groceries, gas and the bills. We meal plan the month as well and try to live out of our freezer and cupboards as much as possible. No buying lunch, no going out, not even a coffee somewhere. It is a good start to the year, and reinforces some good reminders of what we really need." Joseph.
"Accountability. Telling people about it makes you feel responsible to keep it up. I wrote a Reddit post going over my plan and goal in /r/PersonalFinance and I got some feedback... It was encouraging." Hortensia, 27, works for a Government Agency.
"I went NOWHERE except work and to friends' houses. No bars, no eating out, nothing. Bought nothing in general except absolute essentials. Lots of Netflix. It honestly wasn't that hard except for the social aspects. Those were killer, but my friends adapted somewhat to accommodate me. They're cool like that." Lola.
*Names have been changed.