Making a Plan to Become Debt Free

Debt can wreck havoc on a person’s life in many ways, including causing problems at home and at work. It can bring up feelings of anxiety, anger, shame, and depression and can even lead to the breakdown of a marriage, or the loss of a job or home. Financial problems can be extremely stressful and they can have a ripple effect on your health and your life, as well as on the lives of others, especially family and friends.

Today, many people don't believe that it is possible to be totally debt free, but it is a realistic goal. In order to reduce the burden of debt in your life, make a plan to become debt free and work towards your goal.

Let’s take a look at how you can make goals to reduce your debt load.

First of all, you have to make a commitment to yourself. Do not allow debt to control how you live. You have to take control of your debt. Controlling debt may be hard to do, but it can be done if you are serious about it.

You have to design an effective budget that allows you to live within your financial means. If you are not good at budgeting or sticking to a budget, get some professional help from someone who can.

Note: There are many professional financial planners out there who can help you structure your debt in a way to eventually eliminate it. But remember, there is no instant gratification and it may take a while, maybe a few years, depending on how much debt you have.

Carefully review all of the options that you have when it comes to budgeting and then be strict with yourself, but not too strict. Figure out what your monthly bills are, as well as your monthly expenses, and work from there.

Learn to live as frugal as possible. This means finding ways to decrease your bills on a daily, weekly, and monthly basis and by seeking other areas that you can make spending cuts in.

Make it a personal goal not create any new debt for yourself. If you need to buy something, save for it instead of charging it on a credit card.

If you take a serious look at what you do with the money you earn, you can find ways to cut expenses, save more, and decrease your debts.

Practical Examples:

• Instead of eating out every night, cook at home. And when you cook at home, make it a two night meal. Anyway, many people believe that food tastes better the second night.
• Name brand merchandise is great to have, but if you are trying to save money, store brands are just as good. Some store brands are made by name brand companies and are the same product, just with the store brand name. And they are just as good, if not better.
• If you watch movies, consider checking them out from the public library for free, instead of paying for them at the video store.
• If you smoke, cut back or quit. If you drink beer, liquor, and/or other alcoholic beverages, cut back or quit. These are expensive habits and by quitting or cutting back, you can save yourself a lot of money.
• Coupon shop. Coupons are a great way to save money and most grocery and warehouse stores offer discount cards that can save you significantly.
• Learn how to barter with others. There are many people who love to barter and trade.
• Give up expensive hobbies.
• And most of all, stop competing with the Jones.

Finance Topic of the Month: Managing Money