When I graduated from high school and entered college, my parents didn't give me any financial advice. Given their financial acumen, I shouldn't have been surprised. They lived paycheck-to-paycheck and some weeks saw us living without a utility or two until the next payday. You can probably understand why I was so excited to "leave the nest" and start my life as an adult.
Unfortunately, the lack of financial training I received at home soon tripped me up and I found myself with a mound of credit card debt that only seemed to grow larger. At that point I sat down and took a long, hard look at my spending habits. I discovered that I didn't understand my spending habits because I really didn't know exactly where I was spending my money. I decided to try a tactic my weight-loss coach had taught me; for one month I recorded every penny I spent without trying to change my spending habits. At the end of the month I sat down and analyzed where my money was going and was really surprised to see the results. The first thing I learned was that I habitually pulled out a credit card to pay for everything. When I went over a credit card statement and saw how much of my "minimum payment" was going to interest I realized that I was actually paying much more for the things I was buying on credit; those jeans I got on sale were no longer the deal I thought they were!
Once I realized how much of my money was going to credit card interest I made a focused effort to pay off my cards. I started by putting the cards away in my sock drawer so they weren't with me when I was tempted to make impulse purchases. Then, starting with the card that had the smallest balance, I increased the monthly payment on it by $20; yes, that meant I had to give up a few lattes, but I reasoned that I was actually doing both my wallet and my waistline a favor. When that credit card was paid off I added the amount of that monthly payment to the minimum payment on the next credit card. By doing this I was able to pay the second card off sooner. With that balance gone I moved on to the third card and added the amount I was paying on the second card to that minimum payment and it was paid off in no time!
With my credit cards paid off, I used the spending tracking tactic again to see how I had improved on my spending habits. The results of the second analysis were much more positive. I saw that I was out of the habit of making impulse purchases. I had learned to think my purchases over and in most cases chose not to spend. But most importantly, I discovered that I wasn't enjoying life any less without those credit cards; in fact, I was enjoying it more because I wasn't so stressed out about how I was going to pay my bills. After a few months of living like that I even managed to save up enough money to open a savings account and started earning interest instead of paying it.