It takes lots of hard work, discipline, and persistence to do it right.
When those interested in weight loss try short cuts such as pills, extreme diets or those silly weight loss gizmos, such as the jiggle your stomach to make it loose weight thing, they end up gaining it all back, or worse they end up hurt because the product was unsafe.
Doing it right means exercising, decreasing food consumption and for many stress management techniques to help them lead calmer lives.
This leads to lasting healthy weight loss.
Getting your finances healthy again after you have taken on extra debt is no different.
If you try short cuts to make it less painful, chances are it is not going to accomplish everything you want to in a way that will last.
Like bad dieting you end up with the debt back on and you feel even more deflated than before.
Benefits of Getting Rid of Debt the Right Way
One of the benefits is that you increase your self esteem. This happens because when you tackle hard tasks and win you get a sense of accomplishment. Much like a child establishes self esteem by accomplishing basic tasks on their own; you establish more self esteem by sticking to a budget and being in control of your life!
Another great benefit, the one you were going for, is that you position yourself to be able to create financial freedom.
A hidden benefit is improved health (without the dieting!). It has been proven that the more debt you have the higher your chances are for a whole slew of things to occur including: heart attack, migraine, stress, intestinal issues and insomnia.
(Check out my book on the correlation between health and money)
So what is the right plan and how do you get started? Like losing weight has a tried and true method, so does reducing your debt. This formula is increase income, reduce expenses and pay extra on your debts.
Four Tips to A Working Debt Diet
Commit to the process. Decide that you are ready to make the changes necessary and do the work to really pay off debt for good. If you are not fully committed to the process you will lack the patience that you need to stick to it when the frustrations come up. Frustrations will come up; it is not as easy to tackle debt reduction as some may make it out to be, but with a firm commitment your chances of success are greater. Write down your commitment with yourself and sign it like you would a contract.
Second you need to do a budget. I know the dreaded “b” word; unfortunately this is necessary for you to know where your money is going, if there is enough income coming in for expenses and to know how and where to make cuts if needed. It is kind of like counting calories, not exactly fun but one of the only ways to know if you are over eating or not, what time of day you are over eating, and what your food weakness is. It helps guide you to the real problems and then you can solve them.
Stick to your budget and debt repayment plan. I realize this might seem like a rather obvious unnecessary piece of advice. Unfortunately the reality is that it is all too easy to create a budget and plan to pay off debt and then end up not doing it.
So how do you stick with it? You can make a game of it, such as when you get a certain percentage paid off you get to add back your manicure for a month (as long as that still leaves you living on less than you make). Another way to stick with it is to remind yourself of why you are doing this, post a picture of what you envision life like when the debt is gone. It is also easier to stick to your plan when you eliminate temptations. If your downfall is shoes, do not go to the shoe store. If your downfall is too many runs to the local coffee store, then spend a little to get an espresso machine and use that instead (it will pay for itself in a couple months).
Revise and repeat the above process. Your commitment and plan will vary, take the time to regularly update your budget and recommit yourself to the process and it will be easier to stay on task. Life is not static, so your plan cannot be static. The plan needs to flow with life. This way you know you are following the right plan and it will help to keep you motivated to stay with it.
Finally you will reach a point when you lose all that extra debt. The journey will have been worth the struggle and you will feel better than you can imagine right now.
Looking for more help in getting your mindset right and eliminating debt? Check out my debt elimination book to help you get started on the right plan!