Are The Little Debts Drowning You?

By Annette Miller

At first glance it would have been hard to imagine that amidst its impervious metal frame and intimidating size that a tiny by comparison iceberg would eventually be the demise of the unsinkable “Titanic”, was the iceberg fully to blame?, upon closer inspection it was a variety of factors that lead to its undoing:

1. The speed the ship traveled left it unable to alter its course quickly

2. A fire burning for days in the hull weakened the integrity of the steel

3. Poor visibility lead to delayed reaction times

4. The temperature of the water caused the hull to fragment upon collision

5. Telegraph warnings from neighboring ships did not get through, and of course

6. There weren’t enough lifeboats onboard for everyone.

These factors combined brought down the mammoth ship of its day, much like mammoth debt begins innocently enough in the form of little spends it can accumulate quickly into BIG debt leading us on a financial collision course with bankruptcy.

Knowledge is Power

Most of us don’t know exactly how much debt we’re in because lots of smaller spends slip under the radar, it’s the bigger bills that get our attention when in actual fact the smaller ones can be even more menacing with their sheer volume and frequency.

Get a grip on those little spends! You can take control of your finances by finding out where your money is going on a daily basis in fact, I highly recommend keeping a daily log of all your spends and outgoings for the next month, you’ll be amazed to see where mostof your money is going. Buy yourself a 50 cent notepad and under eachday of the week, make a note of all the spends you made, how much you spent andwhat you spent it on. How much you are spending on car payments, mortgage payments, personal loans, insurances, rent, credit card payments, hire purchases, phone, food, power, water, bank fees, entertainment, car running and maintenance expenses, etc.

See where you can cut back on your spending by discarding the “wants” and keeping the “needs”. Don’t be nervous that you discover you’re spending far more than you’d expected at least now you can work on it. Remember, you can’t change what you don’t know. Knowledge is power.

Patterns to Your Habits

Keeping a daily log not only pinpoints where your money goes but also reveals some interesting things about you and your spending habits. I bet you didn’t realize you bought takeout twice a week translating into $120.00/month. Like my buddy The Cookie Monster now says, a cookie (or a treat) is a “sometimes” food, but an 8 takeouts a month occurrence can really add up and hurt the bank balance. Trust me, if you cut back on little spends like that you’ll grow your bank balance and shrink your bottom as well.

Give it a couple of months and you won’t even notice you’re not eating out as frequently as you used to and you’ve saved some money to boot.

So hop to it, get that notepad it’s well worth the 50 cents and can save you hundreds of dollars in the long run, start monitoring your spending today and plug that financial leak!