It’s so easy to get into debt, the problem is how to get out of debt! The good news is that we can get out of debt if we make a conscious effort to do so. Are you ready to be debt free?
The bad news is that getting out of debt is a difficult task. It often takes twice as long to get out of debt as it took to accumulate it. But once you are debt free you will have financial freedom and that opens up a whole new world of choices that you may never have been able to experience while drowning in debt. It’s worth it!
Living without debt means having financial freedom and that is the best goal to aim for.
5 Tips To Help You Get Out of Debt
1. Set realistic goals and take baby steps. Don’t try to change too many things at once or you will become overwhelmed and discouraged.
2. Be realistic and set short-term and long-term goals.
3. Set-up a household budget to help you spend and save your money wisely.
4. Stop incurring new debt and stop using credit cards.
5. Just do it. Implement your plan. Start today.
Understanding How You Got Into Debt
To get out of debt you must first understand how you got into debt. Did you accumulate debt slowly over a number of years by eating out, buying expensive clothes, or electronics and generally just living beyond your means? Or did you accumulate debt due to a medical problem or illness, death in the family or divorce?
Understanding where you came from financially will help you create a workable plan to get out of debt. If your debts interfere with paying for your basic needs, then you have too much debt and need to change your spending habits.
Three basic needs must be met and they are food, shelter, and clothing. However, these can be met without over-spending. For example, you need a safe and comfortable place to live but it doesn’t have to be a 3,000 square foot house on the river. You need healthy food but it doesn’t have to be expensive gourmet food.
Just making small changes in your life can help you get out of debt. Eat fewer restaurant meals, become a savvy shopper by looking for deals and using coupons, take modest vacations and buy used cars to save money and avoid the hefty depreciation new cars experience the first year or two of ownership.
Small changes get you started on your road to becoming debt free but you will have to make bigger changes in your lifestyle if you have accumulated a large amount of debt.
Everyone in the household will have to be committed to getting out of debt. The whole family has become accustomed to a certain standard of living and that will have to change. You accumulated debt by living above your means and spending your future income. The only way to get out of debt is to start living below your means and using what’s left over to pay for past expenses.
To do this you will have to lower your standard of living. That may mean selling your home and moving to a smaller less expensive one. But that’s the price you may have to pay to climb out of the seemingly never-ending cycle of debt.
You must realize that getting out of debt will be hard work and require patience and determination. You will have to learn new behavior patterns, make lifestyle changes and learn different priorities. These changes may take months or years so be prepared and don’t become discouraged. Just keeping your debt from increasing will be a big step in the right direction.
You can do it! We did and it was so worth the sacrifices we had to make in the beginning to get to where we are today.
Leave a comment and share your best tips for getting out of debt.