Developing a Mindset Towards Debt Freedom
Posted by : Premraj | Posted on : Thursday, January 22, 2009
DELICIOUS
SU
REDDITEvery year, thousands of people, out of thin air, decide they would like to eliminate their debt. They decide to take action, lay out the bank statements, credit card bills, a calculator, pen and paper then get cracking. How many times have you found yourself in this situation?
Within a few hours you are frustrated, can physically see the hole you dug yourself into, and become unmotivated. You feel how in the world is it possible to get out of this mess?
Everyone’s first step should be developing a positive goal driven mindset. My realization was simple: I accumulated this debt over at least 5-6 years. It makes perfectly logical sense that it will take at least this long to get myself out of it. Problems do not typically appear out of the middle of nowhere, and if you haven’t learned it yet in life, they do not disappear that quickly either.
How many times have you read that you need to take baby steps to tackle the bigger problem? Probably on any financial blog, personal finance website, professional advice, etc. Here’s the inside scoop: IT’S TRUE.
I set bi-weekly goals, monthly goals, quarterly goals, and yearly goals. Each one of them builds upon the other. For example, my bi-weekly goal is to pack my lunch twice a week, find a way to have fun with friends with less than $10, clip coupons, etc. You can do as many or as little as you like.
The monthly goal is a lot simpler. The savings that I obtain from meeting my bi-weekly goals will automatically contribute towards my monthly goal. Say for example that by meeting my bi-weekly goals I save myself $20 every 2 weeks. My monthly goal would be to pay an extra $40 a month to my credit card bill. As long as I meet the simple bi-weekly goals, it’s easy to meet my monthly goal.
My quarterly goal could be to pay off my credit card. I would have put an extra $120 to my card, and could possibly eliminate it there. This requires crunching your own personal numbers. It may be possible that trying to pay down your credit card in 3 months is impossible, so simply make that your yearly goal.
I personally don’t like planning past a year because it’s way more difficult to plan that far ahead. Life can get in the way at that point and you need to have some wiggle room to accommodate for that
This is a guest post written by Debt Guy from http://thedebtguy.wordpress.com/
