I’m guessing the pressure of your debt is starting to strain your family and you are looking for help with debt problems. You avoid friends because of your money troubles, you avoid family, you fight with your spouse, and the kids aggravate you more than normal when they ask for a treat. You’ve probably spent effort thinking, “If I only made $10,000 more a year I’d never have money problems again” only to have time and raises go by with no real improvement in your financial life. The situation makes you want to scream, “Get me out of debt!” Well you’re ready because you’ve accepted that you need help with debt problems.
Debt is a habit like smoking. When you make more money you simply spend more money. You’ve gotten used to spending 5% more than you make so you keep falling a little further behind. So what’s the next step to learning how to get out of debt fast? It’s time to accept that no one is going to get you out of debt. It is time to turn “get me out of debt” to “I’m getting out of debt.”
Go ahead and say that last phrase out loud. You’ve just started the first part of your goal. Unfortunately, saying I’m getting out of debt is a lot like saying I’m going to lose weight on New Year’s Eve. You really mean it for the moment until the cake gets passed around. In order for the brain to truly accept big changes you have to make them manageable and measurable.
Making Your Debt Goal Manageable and Measurable
In order to make your debt goal manageable you need to break it down into small realistic components. So first total up all the things you owe. Now that you are done crying you’ll want to pick a time frame to pay this off. Don’t pick 20 years, that won’t do you any good. If you owe less than half your annual income I’d pick 2 years. If you owe more than your annual income I’d pick three years. Write this date on a piece of paper or on the wall as a contract to yourself to be debt free. The goal is now real. So the first part of your manageable is looking at how much debt you half to pay off monthly. Take your debt load and divide by the number months you have until your due date. Now you have a local target to hit every month. You are probably saying there is no way to hit this target every month. If this is the case then that is why you were in debt. Your money health didn’t support your lifestyle. Now you have the opportunity to change this with more goal setting.
Now you need a plan to make that debt reduction happen every month. First subtract out the debt that will be paid by making the minimum payments. Don’t forget that some (most) of that minimum payment is going to interest not debt reduction.
My next favorite step is to look at your budget and figure out where you can squeeze out some extra money and send it straight to the debt. Don’t count just your bills as your budget, but all the things you buy without even thinking about it like fast food, coffee, getting your nails done, or stopping for a beer on the way home. These things are not necessary. Take out of the budget what you think you can handle. Write this on your goal sheet as the amount of extra money from you normal paycheck that will go to debt and pay it on debt as soon as the check comes in.
The next step is to look for things to sell. Many of us have small trinkets we’ve picked up that don’t mean much to us. Write a goal for how you’re going to sell a month and then do it.
The final step is to see if your goals add up to enough to pay off the debt in your time line. If it just doesn’t add up then move your date out further. No Not Seriously! The next step is to figure out how to increase your income by enough to meet your monthly goal. Either get a raise or a second job.
See, you don’t need anyone to Get You Out of Debt besides yourself. Help with debt problems can start with you and with you deciding to take action! You can do this!
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