Paying off debt can seem like an endless task. You may have dug yourself into a financial hole so deep that you think you’ll never again see daylight. Talk to friends and neighbours and you’ll likely find that you are not alone.
Debt exists in epidemic proportions in society today, and banks and lending institutions are not making things easier. Interest rates are on the rise and lenders charge exorbitant fees for late payments. At the same time, people seem to be intent on living beyond their means. An entitlement attitude rules the day, as more and more people buy into the idea that they somehow deserve a good life, even if they are not earning their way to that good life. If you have fallen prey to these fallacies and are now stuck in the quagmire of debt, it’s time to find a cure. There are many debt cures they don’t want you to know about.
Quit Digging
The first order of business when you find yourself in a deep hole is to quit digging. In other words, stop spending more money than you make. The concept of living within your means is really just common sense, but unfortunately it isn’t too common these days.
Sit down with pen and paper or a financial software program and craft a budget that reflects all of your expenses balanced against all of your income. List every monthly expense, no matter how small. Little expenses add up over the course a month. In fact, you may be shocked to find out just where your money is going. Once you can see your monthly cash flow, it’s time to make the changes necessary to accomplish a higher number on the income side of the budget than there is on the expenses side.
You may be thinking that your hefty credit card payments and loan payments will never allow that to happen. Think again. If you can’t decrease your expenses, you must increase your income. Take a second or even a third job. Like many medicines, debt cures leave a bad taste in your mouth!
Organise Your Debt
Once the budget is balanced, it’s time to organise that debt so you can tackle it properly. Write down each debt, listing the total amount owed, the interest rate, and then the minimum monthly payment. Then prioritize your debts in the order in which you plan to pay them off.
Some people prefer to attack the debt with the lowest balance first so they can get something paid off in a relatively short period of time. It gives them the necessary motivation to keep up the momentum. Others prefer to pay off the debt with the highest interest rate first.
Once you have a comprehensive list compiled, you need to look for chunks of money that can be thrown onto item number one to reduce it that much faster. Sell unwanted or unused items to liquidate assets and free up some money. You need to find some money, even if it’s in the couch cushions, that you can use to create debt reduction momentum.
Treat Yourself
As you pay off each debt on your list, treat yourself in a small way. Go out to dinner, or buy a small item that you’ve been wanting for a long time. This will stave off the cravings of runaway spending that put you in debt in the first place.
After that one-time reward purchase, put your nose back to the grindstone and turn that payment from the debt you just eliminated onto the payment of the next debt. By adding payments from paid off debts onto your current debt load, you’ll find that debt cure even faster.
Debt cures they don’t want you to know about are not magic potions or formulas, but just a simple common sense approach to financial health and wealth. Our ancestors knew how to live within their means. They also knew how to accumulate wealth and earn their way to a good life. Chances are, they were not born with an entitlement to riches. Hard work and careful spending, combined with diligent saving and frugal living was their recipe for success. Now it’s your turn to leave that same legacy for your descendants.
Paying off debt can seem like an endless task. You may have dug yourself into a financial hole so deep that you think you’ll never again see daylight. Talk to friends and neighbours and you’ll likely find that you are not alone.
Debt exists in epidemic proportions in society today, and banks and lending institutions are not making things easier. Interest rates are on the rise and lenders charge exorbitant fees for late payments. At the same time, people seem to be intent on living beyond their means. An entitlement attitude rules the day, as more and more people buy into the idea that they somehow deserve a good life, even if they are not earning their way to that good life. If you have fallen prey to these fallacies and are now stuck in the quagmire of debt, it’s time to find a cure. There are many debt cures they don’t want you to know about.
Quit Digging
The first order of business when you find yourself in a deep hole is to quit digging. In other words, stop spending more money than you make. The concept of living within your means is really just common sense, but unfortunately it isn’t too common these days.
Sit down with pen and paper or a financial software program and craft a budget that reflects all of your expenses balanced against all of your income. List every monthly expense, no matter how small. Little expenses add up over the course a month. In fact, you may be shocked to find out just where your money is going. Once you can see your monthly cash flow, it’s time to make the changes necessary to accomplish a higher number on the income side of the budget than there is on the expenses side.
You may be thinking that your hefty credit card payments and loan payments will never allow that to happen. Think again. If you can’t decrease your expenses, you must increase your income. Take a second or even a third job. Like many medicines, debt cures leave a bad taste in your mouth!
Organise Your Debt
Once the budget is balanced, it’s time to organise that debt so you can tackle it properly. Write down each debt, listing the total amount owed, the interest rate, and then the minimum monthly payment. Then prioritize your debts in the order in which you plan to pay them off.
Some people prefer to attack the debt with the lowest balance first so they can get something paid off in a relatively short period of time. It gives them the necessary motivation to keep up the momentum. Others prefer to pay off the debt with the highest interest rate first.
Once you have a comprehensive list compiled, you need to look for chunks of money that can be thrown onto item number one to reduce it that much faster. Sell unwanted or unused items to liquidate assets and free up some money. You need to find some money, even if it’s in the couch cushions, that you can use to create debt reduction momentum.
Treat Yourself
As you pay off each debt on your list, treat yourself in a small way. Go out to dinner, or buy a small item that you’ve been wanting for a long time. This will stave off the cravings of runaway spending that put you in debt in the first place.
After that one-time reward purchase, put your nose back to the grindstone and turn that payment from the debt you just eliminated onto the payment of the next debt. By adding payments from paid off debts onto your current debt load, you’ll find that debt cure even faster.
Debt cures they don’t want you to know about are not magic potions or formulas, but just a simple common sense approach to financial health and wealth. Our ancestors knew how to live within their means. They also knew how to accumulate wealth and earn their way to a good life. Chances are, they were not born with an entitlement to riches. Hard work and careful spending, combined with diligent saving and frugal living was their recipe for success. Now it’s your turn to leave that same legacy for your descendants.