How Do I Get Out of Debt?
I wanted Since the economic crisis has forced many people to finally acknowledge overspending, I to write about debt this week, but will write about spending and saving next week.
What has happened? Through 50 years of subliminal programming the masses to buy anything regardless of their ability to pay, stark reality now is staring us in the face.
Burgeoning credit card and other debts are causing millions to lose their homes and worse. We were so ingrained to spend more than we had, that savings were as low as the Great Depression. We cared not... until the bottom fell out. And we don't like what's happened. So:
#1. How do we get out of our self-imposed debt?
#2. How can we survive while learning how to change?
And #3. How can we be as sure as we can that this will not happen again?
Answer to #1: Immediately go into survival mode. Make it a fun challenge! Only buy what is needed to survive: food - cut back - buy cheaper- buy only on sale. No more spending anywhere... on restaurants, clothes, gifts, yes, including Christmas, Sunday drives (gas costs money). Downsize everything: cable or satellite, make do with one vehicle, move into smaller cheaper quarters, sell a collection, sell things that haven't been used for 2 or longer years. Call your credit card and other loan companies and ask them to reduce the amount you owe or lower your interest rates. Pay off the loans having the highest interest rates first. STOP using credit cards! Work an extra job until debt has been paid off. And... to start us on our way to financial freedom... continue that 2nd job until you have an 8- month salary nest egg. In fact, continue to save that extra paycheck just to invest. Remember positive attitude adjustment? While paying down your debt, keep a positive attitude. You now have made new innovative choices that will benefit you throughout your life.
Answer to #2: Keep reminding yourself you are transitioning to a new way of life that will benefit you and your family. As debt goes down, and more money becomes available, do not spend it. Start living below your means across the board. Splurge a little once a month, but only after all bills are paid. Make it as inexpensive as possible or free, but still fun worthy. You've worked hard to reduce your debt, so do not go overboard and start the debt procedure all over again.
Answer to #3: As we transition our spending habits to benefit us, we see positive tangible results. We must continue to be cognizant of our new spending power. When an emergency arises we know we can handle it. When we need a replacement vehicle, we know we can afford it because we buy under our means. We get used to living below our means: we challenge ourselves to save everywhere and have fun doing it.