Whats your News Years resolution for 2014? Lose a few pounds? Be a better parent? Move up the ladder at work? Ok, you can say you dont believe in New Years resolutions but most of the people I know do try to improve themselves around the start of each new year. There is something about the start of a new year that brings about introspection. Let me get right to the point, Im proposing total debt elimination for 2014. Why not? Im sure you hate debt like I do Now is the time to start a debt elimination movement that wont be stopped until the balanced owed equals zero.
There are all kinds of debt elimination scams out there…
Most will provide you with bad information and bad options. Heres a few of my favorite bad ideas:
1. Bankruptcy really? Is that first on the list?
2. Create a new debt to pay off your old debts – now does that really make sense?
3. Blame everyone else and create a picket sign so you can blame your credit card company, the bank, the
Ok maybe that last one isnt really a solution but it is funny sad but funny. Anyway, in just a few moments Im going to share with you my 5 Debt Elimination Resolutions for 2014 along with the secret ingredient of getting completely out of debt and staying out of debt. Are you curious or will you continue to live the American dream, in debt?
Look Id been in debt my entire life I probably financed my crib when I was a child. Things got so bad that I got to a point a few years ago where I absolutely loathed debt. I wasnt blaming other people for my problems but was angry with myself. I wanted out of debt and I was willing to do whatever it took make my way out. I was sick of working to pay bills, not having enough money for a decent vacation, and not having the money for basic things and all the while paying off a television I purchased on my credit card three years ago! Finally my brilliant mind questioned things, this is stupid, what am I doing?
Finally, My 5 Debt Elimination Resolutions for 2014:
1. Renovate your thinking
If what youre doing isnt working then you need to change it. However, you shouldnt focus only on changing your actions but look to change your core beliefs. Youll need to renovate your mind and think yourself debt free . If you change your core beliefs, you wont so easily revert back to your old way of doing things as you truly believe in what youre doing you’re not just altering behavior. This is why diets don’t work as people focus exclusively on changing behavior. Its very important that we renovate our minds when it concerns money and debt. Glean from financial mentors by reading books, listening to teaching or meeting with a financial adviser your trust. Build YOU this year.
2. Make a plan (yes a budget) and use it
The word budget often can bring about feelings of restriction and oppression. However, a budget actually brings about freedom financial freedom. Make time to sit down and honestly evaluate your situation and make a budget. Be sure to create something that is doable and measurable. By this I mean, dont give yourself $5 spending money for the week as you cant stick to that. Also, dont be vague but very specific so you can measure exactly how youre doing at months end. When creating that budget, honestly look for expenses that you can cut and for luxuries you can do without for awhile.
3. Look for ways to increase your income
My wife and I were told a few years ago that we needed to come up with $1,500 within less than a month. This was a huge sum of money at that time and we werent sure what we were going to do. It was urgent we really had to have the money but yet we had no apparent prospects. Did I get into a woe is me attitude? NO! I got focused. I told my wife we were going to make it and I got busy. My first stop was the garage. We sold stuff online using EBay, Zazzle, Craigslist, we had a garage sale and we made the money we needed with time to spare. Things happen when youre focused. Steve Jobs once said that Focusing is about saying no. Focus yourself in one direction and go for it. You may have a skill or a talent youre just sitting on put it to use. Start a business, learn a new trade, but do something. Believe in yourself. If nothing else be open to getting a 2nd job for a time for a season until you can determine next steps. Whatever you do, do it well.
4. Snowball the debt
Im sure know all about snowballing debt by now. Its not a new subject but few people actually do it. However, you need to focus yourself on one debt at a time in order to be successful… all while making the minimum payments on your other debts. Knock out one debt of your choice and hit it hard… its powerful and proven to work. Some say you need to start with the smallest debt and others say to choose the debt with the highest interest… who cares, just get started! The concept is simple. Pay off one debt at a time but never lower your overall monthly payment in order to accelerate the process. In other words, using the example below, all your extra money above and beyond the required $200 a month should be applied to Credit Card #3 until its gone. After that you will continue making payments totaling $200 but now they will be applied to the other two debts with the excess being applied to Credit Card #2 until its paid in full and so on…
Total Debt = $8,000
Credit Card #1, Minimum Payment $120
Credit Card #2, Minimum Payment $70
Credit Card #3, Minimum Payment $15
Sum Payments $200
5. Keep yourself committed to the plan
THE number one ingredient required to get out of debt in 2014 is a passion for freedom. Passion can take you places you would never go otherwise. Dont flinch in the face of failure. Keep things in front of you and people around you that will motivate you to push on toward your goal. If you’re not there yet, get to the point where you can truly say “I HATE DEBT “.
So, should you have a New Years debt elimination resolution for 2014? Only you can say for sure. Only you know if youre ready for freedom and willing to take the ride. Again, Im proposing total debt elimination for 2014. You hate debt. I know you do as you understand that the borrower always serves the lender until he’s free. Start your own debt elimination movement and dont quit. Remember nothing changes in life until WE change. If youre going to successfully get out of debt in 2014, its going to take you hating debt and re-learning all that you have previously been taught about money and debt. Dont fall for the debt elimination scams and other seemingly easy solutions. Here’s to a new year breaking the cycle of debt !
image courtesy of Angie Stalker