Should you bother eliminating your debt? Is it worth the hassle of debt consolidation or refinancing your house? Likely not! You see if you do not figure out how you got into debt and how you will stay out of debt in the future, then what is the point?
I am going to make this simple for all of us. First, how did you get into debt? That is easy, you spent more money than you had. You may have gotten a new boat, taken a luxury vacation or couldn’t live without the latest fashions. Every one of us who were ever in debt spent money we didn’t have and couldn’t pay back right away. This doesn’t make us bad people but it won’t make us wealthy either.
Okay we spend more than we make and it got us into a little bit of trouble. I will refinance my house and get some more credit, pay off the cards and it will all be good, right? Wrong! What is more likely is you will get deeper into debt because you did not take a second look at your spending habits. Meaning, is it your habit to spend more than you make or was it a one-time bad luck thing that got you to this place?
If this is the second time you have been in debt then it is your spending habit. I would also suggest if it is the first time it is your spending habits also. What this means is, of course you need to get out of debt but first learn to stop getting into debt. It is the old story of ‘before you start to put out the fire make sure they have stopped pouring gas on it. ’
How do you do that? There are a few hundred ways. The easiest is cut up all credit cards and pay for everything in cash. That way when the cash is gone so is the spending. This is definitely not for the faint of heart but for sure is the simplest way to budget.
Take a minute and think about who taught you your spending habits. Do they have any money? Likely not, for you to get a different result you will need to actually do things differently. Sit down and do some thinking about how you want your life to be, does it include being poor? Likely not, dedicate yourself to a weekly half hour session of sitting down and looking back over the week at your spending. Then look forward on how you are going to spend the coming week.
If you do this for 6-8 months you will have new spending habits and your debts will shrink and your wealth will grow. If you put in this little effort you can become wealthy, even while earning a surprisingly little amount of money. Eliminating your debts begins with adopting better spending habits. Be smart to be wealthy.
Did you find those tips on debt elimination useful? You can learn a lot more about how debt elimination can help you reduce debt here.