Debt-Free Forever by Gail Vaz-Oxlade (the beginning after the end read novel .TXT) 📕

to be on the Spending Analysis Worksheet. Monthly bank charges, ATM fees, and NSF fees go under Bank. Look carefully at your cash withdrawals. If there are amounts that end in $1.50 or $2.00, those are the ATM fees associated with having made the withdrawal at a machine other than your own bank’s, since banking machines do not dispense “change.” Enter those amounts under Bank and make sure you enter the rest under Cash.

Under Debt Repayment, put the minimum amount you must pay on all your forms of credit (except your mortgage and car loans) to stay on the right side of your lenders. (We’ll talk more about your debt in Chapter 2: Face Up to Your Debt.) You’ll have to deal with this category differently—not entering how much you’ve actually been repaying but using your minimum payments required—because so many people use one form of credit to repay another. They then feel very good about how much they’ve repaid when they haven’t actually repaid anything at all; they’ve simply shuffled the debt around. Using your minimum repayment amounts avoids a huge amount of confusion.

Under Savings, put the amounts you’re setting aside for your long-term retirement savings, emergency savings, kids’ educational savings, and whatever else you may be saving. If you’re accumulating money for a vacation or to buy a bigticket item, that’s not savings, it’s Planned Spending. Start a new category, PS Vacation, and put your amounts where they’ll be clearly identified.

GAIL’S TIPS

Can’t afford a vacation away from home? You can still have loads of fun while you save tons of money if you opt for a staycation. That’s when you stay home and pretend you’re on vacation. Imagine you’re in a foreign city and drum up the same excitement as you would if you were seeing local things in a place you had to pay thousands of dollars to get to. Pick a start and end date for your staycation to make it official. Declare a choratorium—no one has to make their bed, do the dishes, or vacuum. (Consider hiring a cleaning service for midweek to whip the house back into shape.) And pack your schedule full of fun and fabulous things to do.

Communities everywhere have productions ranging from high school musicals to community theatre to professional theatre. Plan to take in a night at the theatre, or go to the symphony, the opera, or a rock concert. With all the money you’re not spending on accommodations, you can have a ball.

Want to spend a quiet day sipping margaritas while the kids swim their hearts out? Find a local hotel with a swimming pool and book in for the day. Have lunch on-site and take a break with the kids for far less than it costs to zoom away to the tropics.

Try new restaurants. If you want to go with a theme, decide you’ll only eat in Spanish restaurants and eat your way through a good cross-section. It’s almost like being in Spain!

Chill out on the couch and read that book you’ve been longing to get into. Rent a mountain of videos for the evenings. And don’t forget to take lots of pictures of your staycation. After all, without photos to flip through, you might forget what a great time you had sticking close to home and doing all the things you love to do.

Do not leave anything off the Spending Analysis Worksheet. If you spent money on stuff and can’t figure out where to put it, make up a new category. It is important that every penny you spent be accounted for somewhere. And if you guesstimate, you’re wasting your time.

STEP 3: FIGURE OUT YOUR MONTHLY AVERAGE

Now that you have the total amounts you’ve spent in a variety of categories over a specific period of time, it’s time to break it down to a monthly amount. If you used three months’ worth of information, you’ll have to divide the total amount in each category by three to come up with an average. If you used six months’ worth, you’ll divide by six. The closer you are to six months’ worth of information, the more realistic a picture you’ll paint for yourself. Yes, it is easier to use less info, and you can always choose to use the statements for the months you didn’t shop all that much. Hey, if you want to keep deluding yourself, you’ll find a way. But if you finally want the truth, if you want to see where your money has been going, you’ll use six months’ worth of information, even if it takes you days to plug in all the numbers.

STEP 4: FIGURE OUT YOUR INCOME

Having come up with a snapshot of what you’ve been spending on average every month, it’s time to get an accurate picture of how much money is coming in. When I ask most people how much money they make, they quote me their gross income. People also have a tendency to round up their income. Both these tactics lead us to believe that we are richer than we are, which subsequently leads us to spend more money than we actually bring home. The only way to avoid this problem is to look at the actual amounts coming into the bank.

Go back over your bank statements and add up all the deposits you made. Transfers between accounts cancel each other out, so ignore them. Include any money that went into your bank account, including your pay, bonuses, support you may have received, repayment of medical costs, government payments including child benefits, retirement benefits, and disability benefits, expense reimbursements … everything. (Since things like medical costs and business expenses are shown in the numbers you are tracking, adding the reimbursements into your income gives you a true picture of your actual financial outlay.)

If you make some of your money in cash—perhaps you work for cash or earn tips—you don’t need to take any special steps to account for this as part of your