With tax season right around the corner many of us are finding ourselves having to take a hard look at our finances. For some of us we are right on track (hooray!). But for those of us who are dreading tallying our yearly spending reports, this time of year could be terrifying.
Debt is one of the most daunting financial and personal challenges to overcome. Not only does it seem absolutely impossible to start tackling debt, sometimes it feels as if we may never fully get ourselves out of debt and become financially free.
As we see the numbers adding up and more commas being added to our growing debt, feelings of defeat may start to settle in. But in order to overcome debt we have to tackle it in small parts until we can eventually pay down all of it.
Here’s an analogy to help. Children often fear that there are monsters under the bed or in the closet. To overcome those anxieties, they go through the room one nook and cranny at a time until they feel calm enough to sleep. They do this over and over until the fear becomes less of a threat and more of a passing thought as they drift off to sleep.
Debt is the same way. The majority of us cannot pay off our debt straight away – we must go at it one small amount at a time till we pay it all off.
Acknowledging the problem is the first step in initiating any sort of change in our lives and for some of us that is a monumental first step.
Here are tips to start making headway on your debt:
Get Out Of The Dark Hole
You’ve already admitted you might have a hard time curbing your spontaneous spending habits. So your next step is to wean yourself off of your credit cards. With the exception of essentials (and by essentials we mean bills, gas and food), try taking a break from your credit card for 30 days. One month – no non-essential spending. If you feel the urge to make a purchase, try instead going through some of your old things, like a closet full of clothes or a junk drawer, and evaluating what you don’t need anymore.
Switch To Generic Brands
Once you start curbing your lavish spending try making small cutbacks on your daily or weekly purchases. Need that morning caffeine kick from a coffee shop? Try fresh brew at home. Lunch at work? Pack it. At your local grocery store buy foods that are less expensive than the flashy name brands. They probably taste almost the same too!
Take A Hard Look At Your Spending Habits
This may be the most intimidating aspect in re-focusing your budget. Taking an inventory of where the debt started to pile on and why it can seem almost unbearable. But by making a list comparing necessary monthly expenses and secondary expenses you can start to see where you can make great strides in getting your finances in order.
We also highly recommend you talk to one of our Member Advisors. Together as a team we can overcome this!
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