The first challange we needed to face was changing how we decide what to spend money on! So, we committed that for one month "if we can't eat it, we don't buy it". Of course, there are some exceptions! I can't eat gas, but I needed to put it in my van anyway. What this affected was those times when I was standing in the grocery store thinking "this is a neat little (___) why not buy it?" But of course, those were things I did not NEED. Many items were on the chopping block that month, but it made me take a good look at where we had been spending money.
We also knew that we needed a plan. We sat down together and agreed how much we would allocate to each spending area; groceries, gas, etc. We itemized everything we would need to pay that month, and I made excel charts to track everything. Yes it was alot of work, but now I can use those charts every month and it helps us know exactly where all the money goes.
We started using all cash. I have seperate pockets in my wallet for things I generally pay for, like groceries and gas, and Shawn has the cash for things like hot tub chemicals. We pay all our bills online, and take out the cash we will need for a whole month. When its gone...its gone. We've needed to think ahead to what other things we may need in a month before we spend money. But it still feels a little wierd to pay cash at the grocery store, I'll admit.
I read Dave Ramsey's book "Total Money Makeover", and tweaked his plan to suit our family. I would highly recommend this book, especially since he looks at finances from a christian perspective, an important difference to us. I love his plan of having a small savings account before paying off debts. That way if something comes up ( like a water heater) you wont have to dip back into credit cards. Then you pay down debts, smallest to largest, to keep your motivation high. He has a total of seven steps, if you're interested, he has a great website and resourses. I couldn't buy his book ( 'cause I couldn't eat it) but I did borrow it from the library.
We also agreed that we would open our minds to ANYTHING God sent our way for free. What an amazing month!
So far, our creativity is flourishing. We have needed to think of new ways to accomplish things, not to just fall back on spending.
What is your first step?