Question: I’m tired of being in debt, and I’m ready to do things the right way. What do you suggest I do?
Answer: If you’re ready to do things the right way, then you’re in a great spot. Eventually, people who live in debt get sick and tired of being sick and tired—and that’s when they finally decide to make a change. It sounds like that’s where you are now.
So here are 5 quick tips to help you make a fresh start:
- Budget. Spend every dollar on paper, on purpose, before the month begins. Give every dollar a name. Basically, when you’re planning for the month ahead, you should be able to subtract your expenses (outgo) from your income to equal zero. When you’re done writing the budget, you shouldn’t have anything left over.
- Dump debt. This is where you need to get crazy. Make a debt snowball, listing your debts from smallest to largest, and attack that small debt with a vengeance. When you pay the smallest one off, move on to the next one and so on.
- Sacrifice something. If you’re struggling with money, it’s time to prioritize. Something’s got to go. Is it the eating out habit? The monthly purchase of a new $500 purse? The leased car? The house you can’t afford? You get the picture.
- Talk with someone. If you’re married, you need to get your spouse on board. Both of you should sit down and make a plan to take control of your money. This is a team effort. If you’re single, find a friend or accountability partner you can trust. This should be someone who will be honest with you and let you know when you’re making a mistake.
- Don’t forget to have fun. Yes, you can still have fun with money. Just budget for it! Make sure you set a side a little money each month to “blow.” Use it to go on a date, buy a new piece of clothing, or spend a night away. You need a mental breather every now and then, but don’t let it blow up your budget.
If you’re serious about making a fresh start with your money, these tips should help. Congratulations on making this awesome decision!