Debt Elimination – Good Medicine, No Aftertaste
Debt is a burden, we all know that. Too much causes worries and that can lead to any number of bad things. In the worst scenario worries over debt can make you ill, perhaps very ill. If you’re faced with this problem the best time to start doing something about it is right now.
Reducing debt starts with a pioneer attitude. You only have $5 left at the end of the month is what your bank tells you. Humbug! You have more than that, you just have to be creative. Start with the little stuff. Eat out one less time per month – saves another $5. Only shop at places along your commute to work – saves gas money. Get creative!
Saving a bit here or a it there may probably won’t decrease your debt at first. Prudent spending will slow and may even stop the downward spiral. More importantly, when you see things starting to “level out” you might just find you’ve suddenly inherited a “can-do” attitude towards debt reduction.
To actually keep expenses down and start reducing your debt you want to start living on a budget. Budget is a dreaded word for most of us. We equate it with a Spartan existence, bland diet, no more toys and the like. Your budget however represents your plan of action. Laying out your budget is not the easiest thing to do, be prepared to struggle at first and it may take a month or two before you actually find a plan that works, a budget that fits. Make a list of what you’re paying out for bills, food, clothing and entertainment. Then start prioritizing and assigning dollars to each category.
Once you have spending under control start paying off outstanding loans. Think of a loan as something you bought or did a long time ago and are still paying for. Was it worth it, and do you want to keep on that path? When you think about it you’ll probably come to the conclusion that paying up front is much more satisfying. you don’t get the bad aftertaste.
You can either tackle the loan having the highest interest first or start with the smallest loan and work up to the largest. Either way works and when followed will result in a snowball effect. As you pay of each loan it becomes that much easier to pay of the next. Paying off that first loan is a victory, a small one perhaps but a victory nevertheless. It’s almost guaranteed that you’ll be feeling better about yourself when that happens and determined to tackle the next loan.
When you’ve finally gotten out of debt you may want to throw a big party to celebrate. That’s OK, you deserve it. Just don’t borrow to pay for the party! Now is the time to live like you’ve just learned to, modestly, within your means, and debt free. Now it’s time to start saving and investing in your future.
Think of savings and investments as paying yourself. You’ve certainly worked hard for it and when you work hard to get some money you tend to be more careful on what you spend it for. In this case it’s those things which are really most important to you. A debt free life can be a very satisfying life and a satisfying stress free life may even lead to a longer one.
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