We all know people who make lots of money yet seem to be drowning in debt. Heck, some of us MIGHT BE those people! Then there are the people who make an extremely modest income, yet have been able to pay off their mortgage or their student loans, or both! We have read about them, have heard about them on the news, and maybe some of us are those people as well!
So what is the secret of those who succeed at eliminating debt?
Simple. It’s all in the SPENDING. The ones who are overcome with debt are usually the ones who are addicted to INSTANT GRATIFICATION. They’re the ones who run to Wal-Mart or Best-Buy for every new gadget as soon as it comes out. They’re the ones who have to have the finest house, the newest car, the Louis Vuitton luggage. They can’t stop. They have been hooked by t.v. commercials, by magazine ads, and by the obvious success of their friends and neighbors. Not having everything they think they deserve is unheard of.
They equate success and self-worth with image and possessions. And when I say “they,” I really mean “WE.” We have all been there. We have all been guilty. Unless we live on a deserted island…alone…with no television or iPhone. Not likely.
How do we turn it all around?
1. Focus on the issue. Stop the mindless and unnecessary spending. Spending your money must be deliberate.
2. You must have a plan for every cent that comes through your checking account. Not paying attention to your money is a big mistake.
3. Your goal must be where you focus. What is your goal? TO GET OUT OF DEBT and to STAY out of DEBT.
4. You will have to be willing to make the sacrifices required to reach your goal. No, it won’t be fun at first, but as you see your debt diminishing, you will have feelings of accomplishment and satisfaction which will spur you on to make more progress.
5. You must be patient and determined. Go ahead and accept the fact that it won’t be easy and that it will take hard work and commitment. There will be times that you will feel like you are missing out. But if you stick to your plan, the sense of accomplishment and relief after conquering your debt will far surpass any feelings of self-denial.
6. You must be willing to do without the “stuff.” Happiness really isn’t about things. The old saying that “the best things in life are free” is, in fact, a true statement. You know that nobody on their deathbed wished that they had bought a fancier car.
7. Everything begins with one small step. Begin by listing all of your debts in order, lowest to highest, and come up with a plan. Dave Ramsey advises paying off the lowest debt first, while at the same time paying all other debt accounts with just a minimum payment per month. When the first low debt is paid off, he suggests taking that monthly payment and applying it, along with the minimum payment, to the next lowest debt. That way, you are still paying out the same total amount each month to your debts. Soon you will have paid off all the lower ones and can begin to focus on the higher ones. Baby steps, people. Baby steps.
8. When you finally reach your goal of no debt (and you will!) sit down with your spouse, your significant other, your family, or whoever is in this thing with you, and agree to abolish mindless spending once and for all. Don’t let yourself get back into the kind of debt that you have just worked your way out of. Have a plan for every dollar that crosses your palm, give money your respect, and do it right this time.
Peace of mind is worth the wait. You deserve it.