Paying Off Debt Isn’t Impossible

How to Pay off Debt

debt reduction plan, plan to pay off debt, how to pay off debt

    We have all heard the saying that debt is a never ending spiral but it doesn’t have to be. If you really committed to paying off debt and staying out of debt, it is possible with a change in lifestyle, spending habits, willingness to sacrifice and a lot of discipline. Many years ago, our family was strapped down in credit card debt and car payments. When we realized it was time to make a change and get our finances under control, the process of doing so was easier than you would think.

    If you find yourself buried in debt and only making minimum payments, hoping that magically your principal balance will decrease, I promise you it will not. Making the minimum payments on credit card debt only satisfies the interest payments and doesn’t get you any closer to paying off debt. Worse yet, if you continue to use that card for purchases, you will never be able to pay it off – it’s designed that way.

Paying Off Debt Requires Changing Your Lifestyle

    If you truly want to pay off your debt, it requires a serious lifestyle change. You will be forced to take a hard look at your lifestyle and evaluate your wants versus needs. This may hit you like a ton of bricks, but that super tv package with all the sports channels and and all premium programming is not a need – it’s a want. Spending $200 a month to have your nails done and perfectly tanned skin in January, you guessed it, it’s a want. Buying 4 cafe lattes in the morning at your local Starbucks – a want.

    When we talk about the high cost of living today and complain that it’s impossible to save any money, that’s not really the case. We just have the ability to spend way outside of our means through credit cards and loans and we enjoy the luxuries that spending other people’s money can bring. But truth be told, it brings a lot more stress into our lives and yes, an abundance of debt that is spiraling out of control.

    A change in lifestyle can bring serious rewards. Sometimes you just have to take a hard step backwards and look at what you are doing. If you are able to do that, you will be surprised at how good it feels to start living responsibly and reaping the rewards of being in control of your life.

Cutting Out “The Wants”

    When my husband and I decided it was time to take control of our finances, and our future, we first had to take a hard look at reality. We cut out cable, stopped eating out at restaurants, buying coffee at the gas station, and spending frivolously on gifts and unnecessary shopping. My husband cut out the cost of gas and parking by taking the bus to work. We worked out a schedule to share two household cars instead of three. We made Christmas gifts for our kids instead of buying high priced toys and games. We stopped buying the fundraising crap that our neighbors’ kids were constantly selling. And most of all, we stopped using our credit cards and started living within our means.

The Benefits of Paying Off Debt

    Believe it or not, we were able to pay off tens of thousands of dollars in credit card debt and car payments in just over a year. Our credit scores rose significantly, our debt to income ratio soared to excellence, and an unexpected thing happened – we became closer as a family. We started spending more family time together and less family time “spending”. Our preteen children at the time benefited greatly by gaining an appreciation for the things that we did have and our relationships improved by sitting down to home-cooked meals instead of running through the drive thru. Once we successful in paying off debt, I was able to resign from my job and become a stay-at-mom since we no longer had the abundance of debt payments to make every month.

Get Ready to Change Your Life

    Next week, I will be posting an article on paying off debt in a calculated manner. You will be amazed at how easy it is to see the light at the end of the debt tunnel. I recommend you take the week to start evaluating what your needs versus wants really are. You may find your “wants” list will change from the overpriced new purse or sports car to a quiet night with the family, enjoying a slow roasted, home cooked dinner without the distraction of the television.

    Check back next week for a step-by-step plan for reducing your debt or better yet, you may find yourself on the path a more sustainable lifestyle and a better understand of needs versus wants before you know it.

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