Got the credit card blues?

One of the most important components of living in prosperity is to have freedom and joy around your cash flow. And the biggest impediment to this is credit card debt.

So for this new year, why not try a new year’s resolution that really works to unhook your credit card addiction forever!

Here is my sure fire, never fails, pay off your credit card rules:

1. You gotta wanta. Credit card debt is easy come not so easy go. If you only want to sort of, not really, then you will fail. This is a challenging task and you must ask yourself some serious questions. Are you willing to get a plan and stick to it? Are you willing to make changes in your life? Such as: Give up dying your hair, do your own manicures, make your own coffee, cook your own dinner? Are you willing to find ways to being happy that have nothing to do with the latest clothing, car, or fad? Are you willing to choose to be happy wearing last year’s fashions? Are you able to say no to that great looking new bedspread on the January white sale? Seriously, get down and dirty and look inside and ask yourself if you are really willing to change. If so, your first commitment is to NO new debt. Ask a trusted friend or family member to hold your credit cards for you while you are paying them off. Tell them your plan (see details below on how to prepare a plan.)
2. During this entire process, (which may take years – yes years – being realistic is important) bless the debt and find out how it has blessed you. Find a point of peaceful gratitude with your debt. What you resist persists. If every time you think of your credit card debt, it is in the context of things like: self loathing, blaming yourself, putting yourself down, feeling hopeless, etc, all this negative internal self talk is just going to make it very hard to pay off your debt. By coming to the debt with gratitude, you will face your debt with a positive attitude making your likely hood of success much, much greater. Keep a journal about your feelings toward yourself for being in debt and about your credit card debt itself. When all your credit cards are paid off, have a ceremony to burn the journal. A bon fire may be in order!
3. Make a list of your credit cards in a columnar format. Account name, limit, outstanding balance, minimum payment, payment you are making, interest rate.
4. Take the smallest debt and focus all of your available cash flow (except the savings amount noted on point 5) on this debt. Make only minimum payments on everything else. Once this debt is paid off, take all the money you were applying to the smallest credit card balance, and add it to the minimum payment on the second smallest credit card until it is paid off. Continue this practice, always focusing on the smallest balance first. Celebrate wildly with each card you pay off. Wildly as in do something fun for yourself, like a walk in the park or a having a friend over for movie night. Not wildly like going out and spending a bunch of money on an extravagant purchase or dinner. Appreciate yourself for being so focused and committed to your financial health. Check in with the person who is holding your cards, and share your success. Write yourself a “thank you for being a financial success” card. Mail it to yourself.
5. Start a savings program. Most people get into credit card trouble because they have no savings for everyday big ticket items, like tires, a wrecked car, a new furnace etc. So it is imperative to begin saving money for a rainy day as you pay off your debt. Do NOT wait until your debt is paid off to begin saving. Start saving immediately. This is not money going into your 401(k). These funds are put in an everyday simple, no fee, savings account. The amount of interest you earn on the balance is immaterial. What is important is that you begin and are successful with a savings plan. First set yourself up for success. Look at your budget and pick an amount you can save every pay period, no matter what. It can be as little as $5. It is critical to start with an amount that you can, no matter what, save successfully. Save this amount for 1 to 3 months. Notice how good you are feeling about savings. Once you have this down, save a little more. Do this for another 1 to 3 months. Save a little more. Etc. By setting yourself up for success, you win and feel good about yourself. This makes savings fun, and a source of positive self esteem. Give yourself permission to use your savings account for emergencies if needed. Watch out.. savings can be addictive. And if this happens, just enjoy it. You are learning to live debt free and it is fun!

May prosperity be yours,
Mackey McNeill, CPA/PFS, IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com