I know that the year has just began but have you ever thought about your wallet?
There are only three possibilities on the status of your wallet: empty, half-full, and full or overflowing.
The latter two is fine but if you belong to the group with empty wallets (or drowning in debt), I guess you should consider having a recollection of your wants, priorities and spending habits.
It’s the New Year, baby! Do yourself a favor and start breaking the chains of debt in your life!
Perhaps this is “the” most important step because without realizing that debt is a problem, you wouldn’t be taking steps to eliminate it.
Problems just don’t go away by themselves or vanish into thin air. After acknowledging the debt problem, it will be very helpful to talk about it with your life partner, immediate family members, or friends. Talking about it will give you a much clearer picture on how serious your debt problem is.
You must admit that you lost control on how you manage your income. You may even list down your spending habits and determine which ones lead you to impulsive buying then start learning on how to control those impulses.
No man is an island. Seek professional or expert help in coaching your way to a debt-free life!
Your debt coach will surely help you develop a spending plan. A spending plan will be worthless if you will not stick to it. Remember, YOU went in to the problem yourself and YOU have to get YOURSELF out of this!
Once you receive your income, allocate a certain amount of cash to your expenses (e.g. 10% for tithes, 15% investments, etc.) and even place them in cash envelopes.
You may have to minimize your budget on certain things like hobbies, vacation, and your favorite Starbucks coffee. I don’t want to sound like your mom but it’s going to be hard work.
Check out your closet and pull out the things you are not using anymore. Sell your stuff online or do a garage sale in your neighborhood. Use the additional income to pay your debt.
What’s an emergency fund for anyway? Guess what? You’ll never know when you’ll get sick or have an accident. If ever you don’t have health insurance, chances are, you’re going to be using your current income and savings to pay the hospital bills and what does that give you? Additional debt. Get the picture?
Whether it will take months or years, you need to set a specific timeline on when you’ll be able to pay all of your debts. It’s like setting a goal and accomplishing it. Smells like sweet victory to me.