Finding Your Way Out of Debt, One Step at a Time

Sometimes, people trick themselves into thinking that getting out of debt is easy. All I have to do is pay off my $300 credit card bill, you think. You forget that this month you have to pay your water bill, cable bill, electricity bill. Maybe it is summer and the weather is scorching hot and muggy (sound familiar?) and the air conditioning has been on more than usual. Maybe your son needed new soccer cleats. Maybe you had an unexpected expense pop up. Whatever the case, what previously was something you were going to pay off in total is now something that you can’t afford to pay; this month, you think, I’ll just pay the minimum. NEXT month I’ll pay it all off. Then next month you have a $450 bill, plus whatever is left from this month, plus interest. Uh-oh… what now?

In paying off debt, the thing to remember is that when making money to pay off your debt, you have to make MORE than the debt amount. Debt accumulates interest. This can get expensive. Some things to consider when dealing with debt:

• There is no ‘magic bullet’ that, when shot, will annihilate all of your debt. You got yourself into debt—you are responsible for getting yourself out of debt.
  
• Set a clear intention. You can’t keep putting debt off. Your intention must be focused: this month, I am going to pay off $250 extra on my college loans. Set a goal and stick to it.
  
• Establish a budget. You will not be able to continue living frivolously if you want to pay off your debt. You’re going to have to create a budget… Think about it. A budget doesn’t have to be the end of comfortable life as you know it. Start by seeing what you can eliminate—eat out two times less a month, and put that money towards paying off debt. Instead of getting your hair done every month, go every other month. Instead of hitting the outlet malls with your girlfriends for a shopping spree, go out and hear a live band at a local park for free. Encourage your husband to spend less on pricy electronic gadgets that you don’t really need. Put all the money you would be spending but are not towards paying off your debt. Then look at ways to cut costs. Is it cheaper to buy the supermarket brand than another, pricier brand? Will your family even taste the difference? Probably not. Then use the money you’re saving to pay off debt.
  
• Set yourself up for success. If, in your quest for budgeting, you take away everything you enjoy doing, you will be miserable and resentful and you will fail. It doesn’t have to be like that! Start small and work your way up.
  
• Focus on ONE DEBT AT A TIME. Try to eliminate your SMALLEST DEBT FIRST. This way, you will see your success and say “I can do this!!”. Then you can conquer your other, larger debts.
  
• Celebrate your debt-vanquishing victories (without shopping). Spend an afternoon at the park with your family. Treat yourself to homemade banana splits. Anything fun you can do without spending loads of money is great.