Getting out of debt – Simple Home Money Management
“You can’t beat the person who never gives up!”Babe Ruth
Getting out of debt is a recipe, and the key ingredients include a positive attitude – you can do this, commitment, devising a plan, recording and monitoring your progress and living within your means.
Let’s look at each step a little closer:
1. Positive attitude – financial burden is a prominent cause for many relationship bust ups be that marriage, friendship sibling or parents. People with heavy debt burden are not typically in a good mind space and this makes it very difficult to see an end to their nightmare.
First thing you need to do is get yourself into a positive mind space. First no matter how bad the picture is you need to know that you can get yourself out of debt. The road to getting yourself out of debt will more than likely be a stormy one with lots of challenges along the way. It will take will power and good humor. There are a number of options available to help you here, there are plenty of inspiring books out there, rent some comedy DVD’s on a regular basis or humorous books, there are also NLP courses to reprogram your state of mind and counseling services and even hypnotherapy which actually does work for some people. 2. Devising a plan – getting out of debt is like pushing your boat out there not knowing where you are going or where you are going to end up. Any journey where the captain and crew have no idea where they are going is sure to cause conflict and even mutiny at some stage. Draw up a debt reduction plan. This plan can be very simple, identify your debts and record them into a spreadsheet or on paper. Note total owing, minimum payment and frequency of payment. Feed this into a budget so that you can see what your minimum monthly debt repayment obligations are and excess money that you have for servicing everyday living expenses. Putting this down on paper immediately provides certainty of your current situation. You can inform the crew! You can then devise a payment schedule and or look at options for debt consolidation to further reduce repayments.
Ensure that you also include in your plan short term goals so that you can track progress. Short term goals could simply be staying within budget over the next month, this might seem lame but I can tell you it is a great feeling having made some sacrifices to live within ones means, kept within budget and then seeing the fruits of will power.
You will need to discuss this with your bank manager or lender to identify options available. The plan (budget) provides a clear direction for the captain and crew (if any) that are on this journey getting out of debt.
3. Recording and monitoring your progress – executing the plan, it is no good devising your plan and then throwing it in the draw. The plan is a living document, you monitor progress with your goals and revise/update goals on a regular basis. Because most of us are time poor ideally a simple money management program is needed to help create a budget, record income and outgoing items, identify spending excesses which helps you to identify areas in your outgoings where you need to make cut backs. Getting out of debt requires regular monitoring and reporting of your income and outgoings, simple money management software will make this an easier task.
4. Living within your means, getting out of debt – credit has been the demise of enabling the majority of people to live within their means. Easy credit be that via store cards, credit cards, dollar down deals, buy now pay later – the create credit list goes on. It is too easy to see and get those wonderful flat screen televisions, home theatre and music sound systems, new couches, kitchen appliances, car, clothes, jewelry etc… without having to pay for them up front. Gone are the days where you had to save up to purchase these items as credit was not available. The simplest way to live within your means is to create your budget that records “needs” first. How to identify a “need” – ask yourself this question when purchasing a product, “can I survive if I do not purchase this product?” if the answer is no, then it is a “need” if it is yes then it is a “want” and “wants” are lower down on the list when it comes to purchasing product to live within your means and getting out of debt.
5. Developing the habit – This is well and good, we can all talk the talk but when it comes to walk the talk that is another matter. If you begin to get your self in the right mind space, a positive aptitude and knowing that you can achieve getting your self out of debt once you have drawn up your plan and possibly consulted with your bank manager or lender and other financial budget services you should be in a positive space to execute the plan and begin on your journey of getting out of debt. Ensure that you stick to your plan and review on a regular basis (weekly preferably) do this and it will become a habit, and habits make life easier.
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