“Debt is the worst poverty.” – Thomas Fuller

It was only a few years ago when I was overloaded with debt – so much so that I couldn’t make all my payments and I had numerous debts sent to several collection agencies. I had creditors calling me for late payments, and I was juggling them, constantly stressed about how I was going to make my car payment and make rent. It’s hard to imagine those days now – the unbearable burden of that debt – because as of this year, I am debt free!

It’s an amazingly liberating feeling to be free of debt. Your money is your own, and you have breathing room in your budget for saving, investing, and buying what you need.

“We are what we repeatedly do. Excellence then, is not an act, but a habit.” – Aristotle

While you can cut costs here and there, the real, lasting changes won’t come until you change your habits. If you currently give in to impulse purchases on a regular basis, for example, you’ll still spend a lot of money despite making numerous cuts in other areas.

An important long-term strategy is to create new, sound financial habits, one at a time. See The Power of Less for more on creating new habits. Use the effective habit-change techniques in the book to change one habit at a time. Here are some important habits to form:

“Whoever wants to reach a distant goal must take small steps.” – Saul Bellow

While it’s important, when scaling back, to try to eliminate non-essential expenses as much as possible, you can’t change everything all at once. And even if you tried, you’d be less likely to be successful – drastic changes don’t stick as well as small ones do.

So start small when you start changing your financial habits. Want to save money? Cut back on eating out a bit – if you currently eat out 5 times a week, for example, try doing it only 2-3 times and save the difference. That’s a great way to start.

“Earth provides enough to satisfy every man’s need, but not every man’s greed.” – Mahatma Gandhi

I think it’s something that’s conditioned in us from an early age, by friends, television, and the general culture: we always seem to want more.

More money, more gadgets, better furniture, a better house, a better car, more clothes, more shoes, more success.

And what happens when we get more? We aren’t satisfied, because there are new ads for new iPods, for new laptops, for new iPhones, for new cars, for new clothes. We have to have those. It’s impossible to satisfy that hunger for more, because our culture is not satisfied with what we have, but is geared to wanting more. It’s consumerism, and it’s the official religion of the industrialized world.