Debt is a burden, we all know that. Too much causes worries and that can lead to any number of bad things. In the worst scenario worries over debt can make you ill, perhaps very ill. If you're faced with this problem the best time to start doing something about it is right now.
Reducing debt starts with a pioneer attitude. You only have $5 left at the end of the month is what your bank tells you. Humbug! You have more than that, you just have to be creative. Start with the little stuff. Eat out one less time per month – saves another $5. Only shop at places along your commute to work – saves gas money. Get creative!
Next step … so you have cut back, and you've found some extra funds. Don't party just yet – you still need to think about reducing debt not just reducing spending. We're going to take the snowball approach to debt resolution.
Take a good hard look at your bills. Write a budget. List everything you pay, even if you don't pay it every month. Add it up, and allow yourself a buffer – perhaps 10%? – on the bills that fluctuate like electricity. Eliminate what you can. Maybe you find it's cheaper the kill the cable and buy two movies for yourself every month.
Once you have spending under control start paying off outstanding loans. Think of a loan as something you bought or did a long time ago and are still paying for. Was it worth it, and do you want to keep on that path? When you think about it you'll probably come to the conclusion that paying up front is much more satisfying. you don't get the bad aftertaste.
Either approach will eventually lead to a snowball effect. The more loans you pay off the more you have available to pay off the remaining loans. Don't start trying to save until you're well on your way. Keep your first priority getting out of debt. You'll also learn a good life's lesson. Living without debt is very satisfying indeed. And living within your means isn't nearly as bad as you were afraid it was going to be.
When you've finally gotten out of debt you may want to throw a big party to celebrate. That's OK, you deserve it. Just don't borrow to pay for the party! Now is the time to live like you've just learned to, modestly, within your means, and debt free. Now it's time to start saving and investing in your future.
Think of savings and investments as paying yourself. You've certainly worked hard for it and when you work hard to get some money you tend to be more careful on what you spend it for. In this case it's those things which are really most important to you. A debt free life can be a very satisfying life and a satisfying stress free life may even lead to a longer one.
