Now more than ever, most people can honestly admit we’re up to our necks in debt. Consumer debt is often exacerbated due to savvy marketing (think glitz and glamor credit cards and advertisements targeted at vulnerable demographics) and a lack of financial education during developmental periods in our life.
The fallacy is that it’s often up to us to get out of debt, and more often than not, its when the debt has already snowballed we become aware of the seriousness of the circumstances we find ourselves in; but fear not, because today marks the first day of the rest of our lives and it’s time we take control of our fiscal responsibilities.
Here are three tips for breaking the chain of debt:
Develop a Debt Mitigation Strategy
This is hands down the hardest step in the process, compiling a list of every cent you owe and adding it up into a number. This number may be very large, or somewhat small, either way, it’s no secret that owing anyone money is a crappy feeling.
Once you add your number up, it’s time to plan to mitigate that debt. Start with calculating the smallest amount you owe for each bill and make sure you pay that, all while chipping away at the smaller debts with a few dollars here and there.
Once you eliminate a debt, take the money you were paying on the smallest and add it to paying off the principle of the next smallest in line.
Set Up Your System
This is where the rubber meets the road, and ironically, where most of us fail, developing effective strategies to make debt mitigation systematic and habitual.
Our minds can be pretty stubborn when it comes to change, as crazy as it sounds, it’s almost as if we fight ourselves every step of the way in order to maintain the familiar; but now that we’re aware of this, it’s our responsibility to act on it.
Be aware of the excuses, your subconscious mind will throw at you, if organization is an issue, put your money in a designated envelope, if you’re traveling abroad on a backpacking trip, use a remittance service to make a payment to your debtors, etc, etc.
There simply is no excuse not to do it once you make the decision to proactively do something about it versus being reactive and wondering “How will I ever get myself out of this mess?”
Go Easy On Yourself
Let’s face it, getting out of debt is hard, and really hard at that. Be patient and kind with yourself if you falter, just focus on better. Not being better, not doing better, but just better in the strictest sense of the word.
It may be the hardest thing you ever do but once you see some progress, you’ll say “Try me” instead of “Why me?”
Breaking the Chains of Debt
Even if most of this seems impossible, it’s not, nothing is impossible if you believe. You’re the author of your story, you’re in charge of what you decide to do.
Even if it’s at a snail’s pace, I have zero doubt in my mind you’ll succeed and live a life of financial freedom.