The final step in our journey is to discover and strategize how much you can put toward debt without substantially changing your lifestyle. This can be very time intensive if you want to understand every nut and bolt on a weekly basis.
However, it can also be pretty straightforward if you want to look only on a monthly or bimonthly basis.
Buy or sign up for cash-flow/spending-tracking software programs. Common examples include Mint.com, Quicken, and MVelopes, among countless others.
Some are free and others cost money. Some banks and credit cards offer software as well. Explore one or two of these programs.
Choose one and sign up for it. Link in all of your assets and liabilities through the service you selected. This typically means logging in through the financial sources that you use.
The best programs will automatically categorize your expenses. They may not be entirely correct. Consider reviewing the activity or correcting the categories. Common examples that need categorizing include written checks, mom and pop stores, and small restaurants.
Go to the section in the software that puts your monthly spending all together. For example, in eMoney Advisor, it is in the Trends tab. As you look at the data, find two or three ways in which you can lower your monthly expenses. Perhaps consider shopping for lower-cost medical/auto/home insurance. See if you can refinance your mortgage. Cut out a trip to Starbucks, eat out less often, take lunch to work more often, and so on.
Now that we’ve talked about expenses, the next logical step is to think about ways to increase your income. If you’ve increased your income and decreased your expenses, you are well down the path to financial prosperity.
How have you increased your income in the past? How can you increase your income in the future? What training or additional education or certification may allow you to gain a promotion at work or become more desirable to other employers or clients?
Consider starting your own small business or moonlighting. Many people today sell trinkets or hobbies through eBay or Amazon. com. What are your talents? What are your passions?
Alternatively, check out Nineline.com or Freelance Physician for moonlighting opportunities for physicians. You can be paid $150/ hour or more. One of my physician friends is now making more money from moonlighting than from his full-time job.
What opportunities could be available to you?
Material discussed is meant to provide general information and it is not to be construed as specific investment, tax, or legal advice. Individual needs vary & require consideration of your unique objectives & financial situation.
Please consult with your accountant or tax advisor for specific guidance."