Written by Charlotte Wood (last updated February 21, 2009)
When it comes to debt, it is always easier to get into debt then out of it. Whether you are trying to pay off your college expenses, get rid car loans, or even paying off some particularly tenacious holiday bills once you're on that slippery slope of careless consumerism and detrimental debt, it's difficult to climb back up onto stable financial footing. When you're falling into the debt pit essentially you don't have any control over your money; the way to get out of debt is to regain control of your financial assets and discipline yourself so you don't relapse. There are a few easy-to-understand ways to eliminate that debt and reclaim control over your money and your financial future.
You need to eliminate any temptation you may have to spend money that you don't have. This is most easily achieved by cutting up the credit cards and figuring out your other loans. I know it's hard to not spend money, especially if you have a credit card, but the best way to skirt that issue is to get rid of the source.
Another way to make sure you don't spend money you can't afford to spend is to stay away from your favorite stores. Steer clear of the Gap, Old Navy, and Barnes and Noble for a month. When you don't have the visual temptations, it's easier to focus on fixing your financial problems. My consumer weakness is Borders. Once I'm in the store I don't have the discipline to say no, so I use my discipline before I drive over there. If I can discipline myself into not going, then I won't spend money. Nip the temptation in the bud!
A great idea is to only use cash or a debit card. When the money is out of your account right away (like with a debit card) you'll be more conscious of what's going on with your money and with cash you can see it physically dwindle, preventing you from spending what you can't afford.
Something that you should begin now and continue for the rest of your life is an account register. If you can visually monitor and see what's going in and out of your account, you can decide whether or not you can afford that Friday night rental or if you should wait until next weekend. When you don't keep track of your money in a log, then you risk spending lots of money in small quantities because you think it won't make that much of a dent. Log it and then you'll know exactly what you can afford and what you can't. Guesswork is a bad idea when it comes to debt elimination.
Establish a budget for yourself so you can limit your spending and establish new habits to get you through your debt elimination. If you know what you can spend and stick to that limit then you can save what you need, pay off what you need, buy what you need. By sticking to a budget you establish control. If you can control your own spending habits then you can control your money and your debt. You'll learn how to find deals and how to make money stretch where it needs to. Control is the key to debt elimination and once you learn that, it's a clear way to freedom.
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