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PARADIGM SHIFT

There may come a time when you suddenly realize that you are spending more than you make. It seems to sneak up on you, usually because you've been doing it for a long time, but suddenly those minimum credit card payments are large enough that you are having to borrow more money in order to service all your debt.

Perhaps you've experienced this? I have. In January of 2006 my family and I woke up. I want to stress that critical point. Not only did we realize there was a problem, but acknowledged our responsibility for it. We woke up. We hadn't missed any payments yet, but that was the direction we were headed. We got sick and tired of the rat race and decided it was time for a paradigm shift regarding our money. That was a great start.

GET HONEST

The only way to get honest with yourself regarding your financial situation is to lay it all out on paper. And getting honest is the only way you can change. When we laid our finances out on paper, we discovered a startling secret we had been hiding. That month, our expenses were over $700 more than our income! There's nothing like seeing that negative number and knowing that it is the result of your own bad decisions.

A budget is part of getting honest. Planning our financial lives one month at a time is the best thing we could have ever done. We got to break-even within a month by cutting back and prioritizing. Budgeting was hard at first....really hard. We had to look at that piece of paper telling us that we had been so stupid! After about 3 months it started to get better. We started to know what the state of our finances was, and setting up the budget wasn't a major deal anymore. It was just taking the previous month and talking through what changes were going to happen this month.

The budget is the reason we have now paid off $20,116 in debt since our low point. It's the reason why we have a small emergency fund in place so we don't have to worry anymore about our checking account getting overdrawn. I don't care anymore about when a bill comes out. We've got over $500 extra a month now, on the same income. Don't fear the budget. It's just you telling your money what to do, instead of stumbling around with it or having it control you.

DEBT IS THE PROSPERITY KILLER

What was the biggest problem we saw once it was on paper? Debt. Debt. Debt. Sure, there was some frivolous spending that we decided to cut out, most of which caused the debt in the first place. So much of our money was going towards making the

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