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Improving Your Financial Life

Blog > 2014 > September > Debt Hole Dig Out
September 02, 2014

Debt Hole Dig Out

Debt can consume our lives and limit our ability to enjoy life. At Financial Center, we believe in improving your financial life. Below are some practical tips to help you dig out of debt.

Stop Digging

We all know how to lower expenses and cut back on lavish purchases, but it’s a lot harder to put our knowledge into practice when shopping. We try to justify our purchases. That shirt is half price. Those jeans are 30% off. Get your mind away from those thoughts. You end up buying more than expected.

Debt is like a black hole. It consumes more and more without giving back. Find your inner will power and break the spending cycle now.

Keep one major credit card

Credit cards can provide a safety net when cash flow is short, but they can be dangerous by making us think we have more disposable income than we really do. Here is the simple way to eliminate credit card debt. Pay the minimums on all cards, but pay as much as you can towards the card with the smallest balance. Use that strategy monthly until that card is paid off. Then move onto the next card. Cancel cards you don’t need to prevent yourself from using them. However, keep one card with low interest to use in emergencies.

Live in reality

Living in reality can be hard at times. There is no doubt about that. You have to be mindful of all debt - even student loans. Take note of what debt you have and create a plan. Ignoring debt is as bad as or worse than not breaking the spending cycle, and coming to the realization that you can’t have everything can be freeing.

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Category: Money Smart, Tags: Debt
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