Since forming and maintaining sensible financial habits is the foundation of debt free living, I revisit them from time to time. The focus hasn’t changed…they’re still sort of dull and straight forward, but oh how well they work.

1. Living within our means: If we’re living beyond our means, then the hole is just getting deeper.
2. Know the true story – Capture all income, bills, assets, and debt: This has got to be the first step in managing personal finances.
3. Face the music: We have to face up to where we are financially…really where we are financially.
4. Commitment: Once we see where we are, we have to commit to getting things on track. If we treat managing our finances as an unwelcome chore, we’ll pay the price for quick and half-hearted efforts.
5. Be frugal, be wise: Being frugal is not being cheap. Being a wise consumer can save a lot of money in the long run, and it only takes a little of our time.
6. The 24 hour wait (48 is better): Waiting 24 hours before making a major purchase is a tried and true way of reducing impulse buying. If we sleep on purchase decisions, we just won’t make as many.
7. Save for a rainy day: Having an emergency fund is the only way to keep the mishaps of life from disrupting a good financial plan.
8. Eliminate debt: The heavy burden of debt drains us emotionally and physically. It’s a cruel master, and has to be eliminated.
9. Get rid of “stuff”: Stuff clouds our minds and our decisions. Stuff we bought and don’t use, stuff we bought and never needed, and stuff that we have with no idea where it came from. It all needs to go.
10. Credit cards: Handle with extreme caution. Unless we’re paying the bill in full at the end the month (every month), there should be very few times when we use credit cards.

These ten basic principles, if followed consistently, can develop into sound personal finance habits that will lead to debt-free financial stability, and a healthier, happier life.

Thanks for reading.