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Seven ways to sweep out debt and let in wealth

logo_womansday1By Robyn Moreno

When spring fever gets you in the mood to straighten up your household, don’t forget to tidy up your checkbook as well. From eliminating lingering holiday debt to planning for a summer vacation, now is the best time to whip your finances into shape.

Track your spending habits

Knowing how you spend your cash will go a long way toward helping you save. Keep it simple, says Meredith Haberfeld, a financial life coach ( Take just one month and track where your money goes. This simple exercise will give you a very clear picture of your fixed expenses (rent, electric, phone, cable and other bills), your variable expenses (vacation, clothes, dining out, etc.), as well as how you’re currently allocating your spending money. Arming yourself with this knowledge is the key to properly assessing your finances and making better choices going forward.

Take inventory of your assets

Taking time to review your income, savings, investments and debt will give you a good idea of where you stand financially. Start by gathering information from all your different accounts for a given month. Jot it down on a single sheet of paper: The document should include balances from your checking, savings and investment accounts, as well as credit cards, loans, mortgages and personal loans from friends. It’s important to include everything in order to get the whole picture; this will help you identify which areas you can afford to splurge on and where you need to save..

Get real

We all do a little creative financing now and again by charging expenses to credit cards without really knowing how we’ll pay them off. Next time you get the urge to swipe the plastic for an unnecessary expense, take a moment to ask yourself how you will pay for it. More often than not, reality will set in and prevent you from creating a bigger financial mess to clean up later on.

Live within your means

This one is by far the hardest rule to live by, but more doable than you think. The key is having a clear sense of your income and spending habits. If you have a pattern of spending on credit, it’s a good idea to eliminate your credit cards; cut up some cards and stash others away for emergency use only. You’ll find that doing so not only takes away the temptation to spend, but will teach you that you can live without all those good deals you’d previously been spending on.

Out with the old

Before you can create a new financial picture for yourself, you need to clean up and clear out debt. To achieve this goal, create a plan that you believe in and can realistically follow. If you need help, friends or family with good financial sense can be a great resource, says Haberfeld. Recruit a friend to be a sounding board to help you devise a responsible-and achievable-strategy for yourself, as well as hold you accountable for staying on course. While you may feel uncomfortable about revealing your finances to someone else, having a friend who can help you stick to your financial resolution is invaluable.


Putting regular bills on auto-pay will help you avoid accumulating late fees on your credit card, and prevent other bills from stacking up. (You’ll still have the same opportunity to review the bill and correct any mistakes post-payment, if necessary.) It’s also a good idea to sign up for paperless billing: You receive your statements over e-mail and pay them online. Most banks, credit cards and investment institutions now offer e-statements that you can download and save to your computer. Lastly, make your life easier by having your paycheck automatically deposited to your account. If your workplace doesn’t offer direct deposit, you can still save yourself a trip to the bank by mailing in your check with a deposit slip that specifies your account number.

Look ahead

Take charge of your financial life by designing goals for the new year. Do you want to buy a house, start a family or go back to school? Having something concrete to look forward to. Understanding how much money you’ll need to get there will make saving (and not spending) easier.