Every year, one of the top 10 New Year’s Resolutions is to get out of debt. If you want to succeed at getting out of debt though, you’ve got to do more than just resolve to do so. It’s not just a promise you make to yourself. It’s also a mindset change.
So if you want to become debt free, turn this year’s resolution into an achievable goal. Here’s how.
Make a plan
Make a plan, and realize that it’s going to take time to reach your goal. This is especially important if you’ve gradually built up credit card debt over the years, because you’re not going to just magically change years of behavior overnight.
But with a realistic plan, you CAN make the necessary changes over time and reach your goal of saying goodbye to debt for good.
Assuming you’re already making at least the minimum payments on your debts, you’ll need to know:
Which debt you want to pay off first (see this post if you’re having trouble choosing a debt to focus on)
Where your money is going right now
Where you want your money to be going (see this article for help in creating a spending plan)
And how much extra you can send to your target debt, right now and each month or week from here on out until it’s gone. Rinse & repeat for the next debt in your list. (Ready to use a debt snowball? Check out the Pay Off Debt app)
Technically speaking that’s it, in a nutshell. But you’ve also got to…
Learn from your past
You’re in debt because of the choices you made in your past. (Yes, things do happen to people that are beyond our control, but we can still choose how we react to them and what we do or don’t do differently in the future.)
Take some time to think (non-judgmentally) about the choices you made in the past, and how you can make different choices in the future.
Did you buy a car on credit because that’s how “everyone does it”?
Did you use your credit cards “just for emergencies”?
Do you eat out too often, even when you don’t have the money?
In other words, identify your debt triggers. Then decide what you could do differently if a similar situation comes up again.
Get your emotions engaged
You’ve got to really want it in order to get out of debt. If you’re married, it’s best if your spouse really wants a debt free life as well. (Know that it’s still doable even if they’re not on board, but you’ll have a tough row to hoe.) Figure out WHY you want to become debt free.
Do you hate getting past due notices in the mail? Hate never having enough money to do the things you want to do? Do you want your children to have a better future?
Whatever the reason(s), write it down. Be detailed, and include how your life will be improved once you’re out of debt.
Then commit to doing it and get started.