Being in debt is a lousy way to live. When we owe ”the universe,” it is difficult for the universe to provide the things we want. Life is a delicate balance of forces and energy. When you’re heavily in debt, life’s balance is upset and the scales tilt heavily against you. That imbalance is a constant source of worry, giving us a collective, national headache – not to mention stress, weight gain, ulcers, depression, anger and low self-esteem. Why have we done this to ourselves, created this self-inflicted pain?
We are not solely to blame. TV, magazines and newspapers are filled with suggestive advertising telling us what we need, in which color, where and when we need it, and why. We’ve also been indoctrinated to best pay for whatever it is by charging it to a credit card. The romance and lure of being able to charge something we can’t afford is inescapable. Shop-til-you-drop is a world-class sport. “I can’t afford it” has all but disappeared from modern society and been replaced with ”charge it, please.” “Cash or credit?” has become a question of ‘Which card will that be?’
Most people aren’t aware how they got into tens of thousands of dollars of debt, or what they’re spending every month. If they ever total their debts, the shock nearly produces a coronary attack. Ask someone how much they spend every month on TV cable and DVD rentals or purchases and they haven’t a clue. Do you know how much you spend a month on lattes? Or do quickly pay with a card at the drive-thru and whiz off, stuffing the receipt in an empty cup holder? How much was the car wash, dry cleaning, or grocery bill and fast-food purchases for a month? The first step in getting out of debt is knowing where you spend every penny of your monthly income. Debt counselors advise keeping a daily notebook of expenditures and record exactly what you’re spending and where you’re charging.
MAKE A SPENDING PLAN
Getting out of debt involves creating a reduced spending plan with the help of a trustworthy friend or dispassionate financial advisor. Be genuinely sincere about cutting back expenses with old-fashioned ‘belt-tightening.’ It’s not difficult to recognize what you can reasonably do without and where those frivolous extras can be eliminated, or at least scaled down. With every purchase, ask yourself: Do I NEED this or do I WANT this? For your spending plan to work, it involves honesty on a continual basis. It’s possible to avoid additional, new debt simply by buying nothing except what you need for one month. When you see how easy it is, you’ll want to continue for a longer period. Before you know it, you will have gone one year without adding to your debt and substantially reduced old debt merely with minimum payments.
MAKE A LIST TO TICK OFF
Another way to reduce current debt is by listing all debt in order of ascending amount, from the smallest to the largest. Pay the minimum on all accounts to stay current, but make a double payment on the smallest bill, which will be the easiest and quickest to pay off completely. If you find a month when you can make a triple payment, that is even better. Another technique is to make a minimum payment plus the amount of monthly interest. If this is possible, it will show a drastic reduction of debt within a few months. A third method for paying off debt is to arrange bills according to interest rate and aim for completely paying off bills in order of highest interest rates first.
FIND ADDITIONAL INCOME
Sometimes cutting back on expenses and making increased payments is not enough to make a difference in your debt, and you might need to find other sources of income. Extra part-time work is an option if time and circumstances allow. If you’re handy in the kitchen, you might offer to cook for parties or sell your homemade specialties at a local market. Martha Stewart began her multi-billion dollar empire selling homemade pies on a table set up outside her home. Another good source of additional income is selling things of value that you no longer need, either in an online auction, on a social networking site, or with a newspaper or bulletin board ad.
REPAYING FAVORS
Having made a commitment to eliminate financial debt, repaying a favor or making good on an old promise to do someone a favor is equally important if you want to not be in debt any longer. Start with people in your life presently. Did you offer to help someone paint their living room and then back down? Have you been eating dinner at your friend’s house every month for the past year and never returned the favor or reciprocated in any way? Do you get a birthday card from Aunt Millie every year but never remember to send her one, or even call? Do you never feel an obligation to return a favor? Do you take people’s kindness toward you for granted, without ever going out of your way for them? As Forrest Gump would say, “Kindness is as kindness does.” If payback for generosity and consideration is not your habit, you might be seriously ”in debt.” While you’re at it, spend a little time, not an obsessive amount, looking to the past. If you slighted someone or took advantage of them repeatedly, chances are they’ve been a nagging subconscious presence, that one day might surface. Twelve-step programs call it ”making amends,” either directly or with a letter that might never get sent if the person is no longer in your life.
Wiping the slate clean, whether on a personal level or financially, feels good and liberating no matter when it’s done. It requires honesty, sacrifice and commitment. It guarantees a new beginning a necessary first step toward your best year ever.
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