Breaking Bad Debt
The first step in breaking bad debt is changing your current spending habits
Debt is the worst financial habit anyone can form. It is easy to get into the debt trap. It is easier still to maintain the habit. However, the best you can do for yourself is to kick the habit.
How does debt come about?
Simply put, debt doesn’t creep up on you in any subtle form. It faces you head on and challenges you:
“Take this.” “Get that.” “I want.” “I have to have.” “Discount.” “Sale.” “Limited Offer.” “Now, Now, Now!”
In a typical scenario of trying to keep up with the Joneses, or perhaps trying to out-do the Joneses, consumers tend to deplete their credit cards and credit accounts, and then top it off with personal loans and loans from unassuming family members and friends.
Then, in order to cover payments on these debts, more debts are accumulated. To add the metaphoric cherry on top, fees and interest are added to the outstanding amount.
Eventually the hamster wheel of debt becomes a roller coaster ride (without the thrill) which has lost its ability to slow down.
The never-ending spiral of debt seems to bury consumers, offering them no reprieve and no effective way out.
Debt is not the pit of doom and gloom that it appears to be. Take a step back, consider where you are right now and be honest with yourself: do you really want to stay there, or would you like a way out?
If you are looking for a way out of debt, then keep reading!
The first step in breaking bad debt is changing your current spending habits. Purchase only what you need. Don’t look for new debt. Stop the cycle, and stop it right now.
One needs to realise that there is a difference between needing something and wanting something.
To establish the difference, consider what the bare essentials are you require and what you can live without.
If you absolutely cannot live without it (and by this term we mean that it is utterly essential to life), only then do you consider the purchase of the product.
Another habit to break is using available cash. You may need to withdraw cash for a specific purpose. If so, withdraw only how much you need. If you are left with change after the purchase, put it into a money tin which you stash out of reach. It is no use if you start saving your change and then fill your wallet just to spend it anyway. Perhaps attach a purpose to the collection. For example, you could say that once you have enough money you will purchase that outfit that you have had your eye on for some time. That way, you are actively saving and you won’t have to purchase the outfit on credit.
The second step is a breakdown of the budget (which we consider in our next article).
Remember that having bad debt is a health risk! It adds mounds of stress to an already stressful life. When trying to deal with all the debt you may have incurred over the years, you need to face it with a healthy attitude, a solid game-plan, and the determination to succeed.
– Break the habit of bad spending
– Make a conscious decision to do so
– Be disciplined and focussed.
It is all up to you!
The second step is a breakdown of the budget