The 5 Golden Rules of Getting Out of Debt

Everyone has, at some point, been in debt. Being buried in debt isn鈥檛 fun.聽 I鈥檝e been there. As they say, education shouldn鈥檛 be a debt sentence: it did turn out that way for me, as I鈥檓 sure it has for countless students out there.
As you read these finance blogs on the web, you鈥檒l be sure to come across great advice on how to tackle your debts.聽 Some of the typical advice will be about budgeting, changing spending habits, and even contacting your creditors for help.聽 These are all great tips that are essentially the framework for anyone looking to pay down their debts.
Dave Ramsey believes that getting out of debt is 20% knowledge and 80% behavior.聽 I couldn鈥檛 agree more with his statement.聽 Your debts won鈥檛 magically disappear overnight, so it鈥檚 important to stay grounded and motivated to become debt free. 聽Here are some of the ways I managed to fight this uphill battle and finally became debt free:

Don鈥檛 Use it if You Can鈥檛 Afford to Lose it!
Cardinal rule number one: stop spending what you don鈥檛 have. It鈥檚 easy to fall into that game: sure, I鈥檒l pay it off LATER after the next paycheck, allowance, etc. Trust me, I know that game all too well. That is one too many I played in my college years, but all the more wiser now.
Why else do you think these card companies used to hit up college campuses & provide free giveaways for signing up? People like to spend money that they don鈥檛 have! The idea of money that you can pay back later is actually pretty genius. You don鈥檛 see the cold cash in your hand- the credit card itself it actually an illusion of money. You don鈥檛 see yourself really spending it because you鈥檙e not.
Just put it on my tab, and I鈥檒l somehow find a way to pay for it later.

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The first step is always to stop using it until you鈥檙e able to pay back or down what you鈥檝e already spent. Put that card away- leave it at home or in safe keeping someplace, so you鈥檙e not tempted to use and abuse it.
Weekly Vs. Monthly Goals
Setting monthly goals are important, but you need to break it down into smaller goals first. If you set weekly goals for yourself, you鈥檒l be able to see immediate results that will keep you motivated.聽 The main problem with monthly goals is that most people are overspending by the third week into it.聽 When the fourth week comes around, you鈥檙e already over your budget!
A Monthly Budget Just Isn鈥檛 Enough
Brian Tracey, self development guru says:
鈥nowing is not enough; we must apply. Wishing is not enough; we must do.
So you tell yourself that you鈥檙e going to spend only $350/month on food. That鈥檚 a great start, but how are you going to accomplish those goals?聽 Most people have an 鈥渋dea鈥 of what they鈥檙e going to spend each month, but they don鈥檛 have a clear road-map of how they鈥檙e going to get there.
Does this mean that you鈥檙e going to spend $50/week on groceries and spend only $150 on eating out?聽 Or does this strictly mean that you鈥檙e only eating out for lunch and cooking at home?聽 Map it out, then put your plan in motion. I don鈥檛 know about you, but I鈥檓 a highly visual learner. Write down and draw out a visual if you have to. This is something you will have up in your living arrangements somewhere, so you will see it on a daily basis and be constantly reminded of your spending. It鈥檚 like that workout regimen that your trainer spells out for you. In this situation, instead of 20 squats, you will see $20/week for snacks.
Reward Yourself..You Deserve It鈥
Setting goals are important in anything you want to accomplish in life. You don鈥檛 have to eat ramen and spam every night to save money on food, although I do know some people who have. Punishing yourself leads you to become demoralized and you鈥檒l eventually lose focus.聽 Instead, you can reward yourself for good behavior every month by treating yourself out to a nice dinner or a night of entertainment (get your mind out of the gutter).
Swallow Your Pride and Ask For Help If Needed..
Last but definitely not least, most people need to swallow their pride and acknowledge their debt problems. Contact your creditors and see if they have any internal workout solutions to lower your interest rates.聽 You鈥檇 be surprised at what kind of help they can give you!聽 The best part about this is that some of the programs don鈥檛 require your accounts to be closed.聽 If you鈥檙e worried about your credit score being penalized, this can be a great option for you.
At the end of the day, you must put up barriers to stop yourself from self-destructive behaviors.聽 If you鈥檙e able to figure out how you got into debt in the first place, you can take preventative measures, so you don鈥檛 fall into the same traps as before. We are, after all, creatures of habit. Create new habits in place of the old- and stick to them! Put in an honest effort to getting away from your old ways, and experience being free from the debt game.

This post was published by Pearl Park, for 禄聽ReadyForZero.
ReadyForZero is a company that helps people get out of debt on their own with a simple and free online tool that can automate and track your debt paydown.


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