5 Steps to Start Getting Out Of Debt Today
I’d like to introduce this article by mentioning something pretty obvious, if you are here reading this right now chances are high you have more or less significant debt, and you haven’t figure out yet how to get rid of it. Truth is, you are definitely not alone! Especially now, when getting into debt is so much easier than ever before.
Just think of it, credit cards, various loans, and even debt consolidation programs are designed to get us addicted to using these mediums all the time, acquire stuff we don’t always need and getting ourselves deeper and deeper into the endless hole of debt. That is why I this topic is so critical.
So, what can we do? Can we break the vicious cycle? Can we escape?
Good news, girls, there is a way. Actually, multiple steps will get you out of debt (P.S. It might not be a way you were thinking of). Bear with me, and we’ll get to that in a sec, promise. But first, I feel it’s crucial to say a few words about something common to every person in financial distress. The shame of having debt. Long story short, there is no need to feel embarrassed about having financial difficulties. Why? Because, this can happen to anyone of us, independently of our social status, a country we live in or even income level we are accustomed to. Shame is a detrimental and unnecessary feeling that will only keep you away from your goal of becoming successful. Quick story to illustrate what I mean.
I had a colleague once, who was always wearing designer clothes, lived in a beautiful prestigious apartment complex and was driving a brand new expensive car. I assumed that he came from a wealthy family since his salary was certainly insufficient to cover these expenses. Until one we went for a drink, and he broke in tears, telling me that since his student years he has a massive debt that is growing each year no matter what. He was brought up in a low-income family but always wanted to live a life full of luxury he could not afford.
It so happened that in college he started to hang out exclusively with kids from wealthy families. Kids who had unlimited accounts and black credit cards. Hence, he felt the need to stick as closely as possible to their level of expense. The only way for my colleague to do so was by borrowing more and more cash from multiple sources. A few years later he graduated, found a good job, got promoted several times, so his paycheck looked more than good on paper. But in reality, his debt was growing and multiplying along with his income. Ashamed of financial struggles, he was not willing to recognize that it became a huge problem, one that almost led to complete bankruptcy. Luckily, he was able to come to terms with his feeling of shame in time and make the first step to get out of the debt.
Sign Up for Weekly Updates from NPY Blog!
Plus Get Exclusive Access to Bonus Content & Special Offers
Do you already have an idea of the very first thing he did?
Step 1 “Houston, we have a problem.”
No good solution was ever discovered, before recognizing the actual issue. You are not fixing a problem if you just keep ignoring it, it will not go away by itself. Once you have admitted that debt is something to deal with urgently you can then start applying tactics and methods that will help your financial matters to get better. This step is especially crucial for people who, like my friend in the example above, are perpetuating their debt growth month by month, year by year. If you have successfully dealt with this task, you can move to the next step.
Step 2 Do it like a smart girl, you know you are.
“What are you talking about, Alexia? Are you implying I’m not smart?” – I can almost hear you say. Allow me to explain.
In the beginning of this article, I mentioned that some information might surprise you, well, here it is. Many of us unwittingly assume that the way out of debt is a higher income. We often think, “Oh, if I could just get that pay raise, I could easily fix my budget,” but most of the time it doesn’t fix anything. Even worse, we then see our debt growing proportionally to our income. Clearly, not something we want to witness happening.
To be completely honest, I remember having the same issue years before. Bigger paychecks only induced my willingness to spend more and more, and more. Until it finally got to me. A different approach to the problem was needed. It got me straight to the step three.
Step 3 Manage like a boss
When it comes to getting out of debt, there is no better plan as actually to have a plan. I am talking about your budget itself. Indeed, we predominantly learn to manage our funds the hard way.
Excelling in money management is the step that you decidedly cannot avoid if you ever want to be completely debt free. Plus, as a bonus, this will significantly increase your chances to be financially successful it the future.
Money management involves many elements, but planning how you spend it and setting your priorities straight is absolutely crucial. How many times you bought something cool (or appeared to be cool) that really appealed to you at that moment or even seemed a matter of extreme urgency, but then it ended up lying there in the corner, being completely useless. I am sure you have some stuff like clothes you never wore or appliances you never used, but spend quite a sum to acquire them, caught in a moment of temporary insanity of impulsive shopping.
(It might seem crazy!) But you can avoid overspending by planning your budget. Although it will only work under one condition; you have to be sticking to that plan.
TIP: For a month collect every receipt of everything (absolutely everything) you spend your money on. Then analyze your expenses I am one hundred percent sure you will be at the very least surprised where your income is going (trust me). Now, breathe, take a moment to recover from the heart attack you just had, and use this knowledge to plan your next month’s expenses.
Hyacil Han, an author of “Investing made easy”, wrote, “Rich people think long-term. they balance their spending on enjoyment today with investing for freedom tomorrow.”
Step 4 Cash out before you start losing (again)
Ok, now is the time when we have to have some serious talk. And yes, more serious than budget planning. You guessed it, I am referring to credit cards and consumer credits, but especially credit cards. As difficult as it might be, you have to put an ending to credit card debt once and for all. Best advice you can get here is the most obvious one, use cash (period). While it’s still ok to use credit cards to make payments and reservations online, make sure that you have sufficient funds to cover the credit before you have to pay the price including interest.
[Tweet theme=”basic-full”]It might seem that credit card is expanding your budget limits, but this is only an illusion, that catches with you later (it always does).[/Tweet]
Now I know, the temptation to use a credit card is undeniable. Using cash often means that you have to wait longer to buy something (you think) you really want and you might even forget about your budget just to get it. But, please, have some patience, and you will see, that waiting has its benefits. For instance, sometimes your priorities shift and you end up not making this purchase at all. Especially right when impulsive buying is concerned.
On the other hand, what if you want something very (very) bad and positively not enough cash to acquire it anytime soon? Well, next step is just for you.
Step 5 Reset your mind
Resetting or simply changing money mindset can do a lot. Very possibly, more than you might think at this point. It is a game changer! It can significantly improve income or manifest your wishes, often, in unexpected ways. Even better, your debt can disappear as a result of these improvements, considering you follow through with previous four steps as a mandatory measure.
A correct money mindset consists of so many elements that were covered previously on this blog and, of course, will remain a subject of further articles to come. But basically, it means that you have to change the way you see money and income and free your mind from limiting beliefs you have absorbed or developed in the course of your life. Then you will be able to generate revenue and get what you desire through simple, yet powerful techniques such as, affirmations and visualization.
Speaking of positive mindset…
In next article I will be giving you tips on how to use positive thinking to get rid of debt, so be sure to check it up. Until then you can start focusing on what you think and what you say about money, income, and debt. Especially things you say about your income, your money, your debt. Make sure everything you say is positive, and only positive so things can start working out your way.
To recap: there is hope, getting out of debt is a process, and it takes patience and discipline, but at the end of the day without a doubt it’s achievable.
So, how do you feel about credit cards and loans? Do you plan your budget? What do you do to come to be and stay debt-free? Share your thought and questions in the comment section below 😉
If you want to learn more and ready for real coaching and fast results (including getting rid of debt for good), check out NPY (NewPositivelyYou) coaching programs and free courses. And don’t hesitate to share your thoughts and experience about getting out of debt mediums.
>>>>Wishing You Luck, Love and Success!<<<<