Before attempting to rid yourself of debt and start saving money, ask yourself this question: How did I get into debt in the first place? There are some very common reasons most people get into debt and are seemingly always having to dig themselves out of it. Those reasons are lack of sufficient income, unexpected personal or medical problems, and poor money management. This last point is probably the most common reason for debt, though most people would not want to admit that they spend more than they can afford. In some cases, the “attitude” behind debt must be conquered before even trying to get rid of debt and start saving.
Falling back into debt is very easy, and will occur over and over again if we don’t first attack the reason behind it. Let’s face it: Americans have a tendency to overspend or buy things on credit. We don’t like to deny ourselves luxuries or things we want, so we purchase on credit, hoping to pay it all back on the next payday.
This thought process must be conquered before any real money management mountains can be climbed. It is essential to get into the habit of paying off credit cards monthly, or using cash or debit only, and maintaining a budget that matches income. An easy way to conquer this “must have it now” attitude is to write up a budget and stick to it. Keep a copy of the budget in your car or purse and look at it daily. This will remind you how much you have to spend and will help prevent you from splurging on things that you don’t really need.
To write a budget, one option is to purchase a good budgeting program. There are many available online, such as Dave Ramsey or Crown Ministries. These two are particularly good because they both tackle the true attitude behind indebtedness. Once you have written up a budget based on your income, the next step is to look at your “debt” category. Debt includes medical bills, credit cards, car loans or home loans.
Tackle the smallest debt first while still continuing to pay the minimum requirements on any other debts. For example, if you have to make a monthly car payment, monthly medical payments, and home mortgage, and your smallest debt is a medical bill for $85, pay that one off first and as quickly as you can.
Any extra money you have freed up from paying the smallest debt should go toward paying off the next-smallest debt. Do this until you are down to just a house payment, and then put as much extra per month on your mortgage as you can.
Do extra side jobs if you have to, to have enough extra to put towards your largest and last debt. It will take some patience and perseverance, and you will have to have family members going along with the plan, but it will be very rewarding in the end. At the same time that you are paying off debt, you should be trying to save 10 to 20 percent of your monthly income.
Even saving 5 percent of your income is better than saving nothing. If you cannot do that, then try tweaking other areas in your budget until you can save a little per month. A lot of times, we have things we don’t truly need and can get rid of or downgrade: cable television, energy drinks, alcohol, or iPhones.
You have to really want to get out of debt — and stay out of debt — to make it happen. It is possible, and thousands of people get out of debt all the time. A strong, positive mental attitude and self-control are the keys to making your dream of getting out of debt and saving a reality.