Debt Crash Diet: Plan Well

Pre-teens are notorious drama queens. (The girls and the boys equally!) There is no easy way to tell them things are going to change drastically. Giving them a couple of months heads up helps.

When my husband and I decided to go on a Debt Crash Diet in 2006 we gave ourselves three months to plan. During those months, we eased our kids into the changes that would affect them the most.

We also took a good hard look at our spending habits. We kept a record of our spending and our earnings. You'll find that this is one of the most important steps you can take. Once you have concrete information about how you spend your money, you'll be able to define Extreme Frugality for your family.

We will live on $28,800 in 2006, $14,700 of which is rent. (We considered renting an apartment for year but decided, with the Las Vegas housing market in such turmoil, to stay where we are. Our rent is moderate for our city.)

During the three months prior to the start of our Year of Extreme Frugality, we also got our food budget under control and built up a good stockpile of staples. During our Debt Crash Diet we will cut the $1000 we normally spend on food and consumables (including restaurant meals) by three quarters down to $300. It was nice to have three months to ease into that.

The most important thing you can do during this planning period is dream. Dream big, and out loud. Do it in front of your kids, and you might have an easier time getting them on board. Put together a Debt Crash Diet scrap book filled with your ideas of what a debt-free, job-optional life would look like to you.