New Year’s resolution: Get out of debt
I was trying to review my previous columns and some of my previous emails especially those coming from my readers to see what other topics I could write for the last week (actually it’s the last day) of 2014. Then I noticed, a lot of the emails from my readers were questions pertaining to their delinquent credit card problems, debt troubles and harassments from collection agencies.
So for this coming new year, I want my readers to make a firm New Year’s resolution- to get out of debt or to be debt free. The process to get out of debt trouble is not as difficult as one may think. However, to actually achieve it will take a lot of discipline. If one wants to be truly out of debt trouble for this coming year, one cannot dilly dally. Being out of debt trouble or being debt free is a matter of decision. This decision requires a lot of sacrifices and self-discipline for one to reach this goal.
Personally, I always believe that all big tasks start with simple steps. Reducing or eliminating debt is no different. While it seems that it is like a huge, almost insurmountable challenge to hurdle, there are some simple steps that can be taken to get you back on track. And once you start taking these simple “baby steps” towards getting back into a more manageable personal financial health, you will feel in control of your finances and your life once more. Below are two basic steps that can be followed to guide you towards getting out of debt trouble.
First, take time to track your spending. The first and most important part of the getting out of debt problem process is to be aware of how you are living or in short, determine how your lifestyle is. Are you living within or beyond your means? By actually tracking your spending, you could actually monitor where your money is going. The objective here is being aware where is your money being spent on. If you don’t know where your money is going, there will be no way you can positively plan towards saving money and paying down debt. Some calls this knowing or tracking your spending habit. Just make a simple “diary” or make a list of your daily expense. The more honest and detailed you are in doing this, the more you will be able to achieve the objective.
Second, know how much you are in debt. Your decision to get out of debt will be more firm if you realize and of course admit that you are actually in debt. I know a lot of colleagues who have not realized that they are already sinking in the so called debt trap while some are still in denial that they are already in debt. These are the ones that pay only the minimum amount of their credit card or living from pay check to pay check. I know this is hard to accept but quite easy to find out. By writing down all outstanding bills, expenses and other payables for the month and by subtracting it to your income and other sources of income if any, you would know if how much you are in debt on a monthly period.
Then if you have previous debt just add them and you would realize two things. First, you would know how much your total debt as of now and second, how much it would increase monthly if you would not do anything.
Being debt free is not only good to your financial health but also to your mental health as well. Not only you will be stress free but you will be able to live a more balanced and meaningful life.
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