10 Ways to Get Out of Debt and Stay Out
People usually dig themselves into a financial hole by their spending habits. If your debts keep piling up, you need carefully to examine your spending habits and make some corrections. If you follow these 10 ways to get out of debt and stay out, you should be able to dig your way out of the negative financial hole.
1. Plan a spending budget: Living above your means is unsustainable and will eventually bring you down. You cannot work for average wages and expect to live as if you are rich. Plan a budget based on your take home pay and stick with it. Remember, it is not necessarily how much you make but how well you spend and how well you save.
2. Increase your education: Good paying jobs require knowledge. Knowledge comes through experience or training. If you go for a college degree, expect to earn about a million dollars more over a lifetime. If you go for a master’s degree, expect to earn nearly three million more in a lifetime career of about forty years. Figures do not lie, so get the education; it pays big. Do not stop learning after college. Learning is a lifetime responsibility if you want to better yourself.
3. Set Goals: A goal is not just wishing you had something it is deciding what you want and then working hard to achieve it. Anytime is a good time to start setting goals but the best time is when you are young, even in high school and surely by time you are in college. Determine early what you want and where you are going. “If you don’t know where you are going, any road will do,” –George Harrison.I waited until I was 34, I am sorry to say, before I decided what my goal in life was. Nevertheless, when I decided, I worked the hardest I have ever worked to achieve it. I had a wife and two small children and a full time job. I started college and sandwiched it in with my work. It took six years to get my degree. I never studied until the kids were in bed, and I took time with my wife and still graduated college with honors and an “A” average. I am not a genius by any means, but I am a determined person and a hard worker. I know it sounds like a cliché, but if I did it so can you.
4. Learn to be content with what you can afford: Money and things do not equal Contentment it is learned. Living within your means is the way to contentment and peace of mind. Also, avoid the pitfall of trying to keep up with others; it is futile and can bring you to financial ruin.
5. Avoid bad habits that cost you an arm and leg: Bad habits like smoking, drinking, drugs, poor exercise and bad eating habits cost a fortune. For example, a pack a day of cigarettes, based on the average of $6 per pack, means that you are burning up $2,000 a year. You can also tack on an extra $35 per pack for additional health cost, according to the American Cancer Society; that brings your cost for smoking to around $12,775 per year and of course double it if your mate also smokes. Consider, also, that you can expect to pay with about ten years of your life. Ten years of life means $30,000 year forfeited, which is an extra $360,000 in lost wages. Even moderate drinking can cost you over a $1,000 per year. Drugs can cost you everything you have and kill you to boot. The mild habit of regularly drinking coffee at Starbucks can cost hundreds a year. Bad food habits and lack of exercise will cost you your health plus additional medical bills. This should make a strong point of warning for you to deal with bad habits; if not, forget about ever digging yourself out of the hole, the dirt will eventually fall in on top of you.
6. Stop wasting your money: Never buy anything on impulse. If you want something badly, take time to think about it and decide if you really need it or not. If you then decide it is within your budget, and you need it, buy it. However, if you continue to make multiple, unplanned purchases, it will blow your budget big time. The best way to avoid unnecessary spending is to make a list of things you need and stick with it.
7. Never Play the Lottery: I can connect my toaster to the electrical outlet only one way, and I miss it over half the time, and that is one chance out of two. The odds of winning the lottery are about 1 in 175 million. If that were the case with my toaster, I would never have toast again. A $10 a week lottery expense adds up to $520 per year. People into the lottery average twice that or more. If you count on luck for your wealth, you are going to be disappointed big time. Financially successful people rarely play the lottery, the reason, they are to smart. The money some spend on the lottery alone if invested wisely could help build a good retirement for old age. If you spend $1,000 year on the lottery each year, stop and invest it; only at 7% it will grow to over $100,000 in 30 years; not a bad nest egg from just the one source.
8. Pay off credit cards: If you must use a credit card, pay it off each month and avoid finance charges. Never pay minimum payments unless you plan to pay for the rest of your life on a debt of a few thousand dollars. The average national credit card debt is around $16,000, which would be impossible to pay off making minimum payments. At 15% interest, it would take 32 years at minimum payments to pay off only $5,000 and your interest would be around $8,000. That could put you in a financial hole in a big way.
9. Pick your friends carefully: Your parents told you when you were growing up that bad company causes trouble. That advice is still valid if you are an adult. Friends who spend their money wildly influence how you spend. Pick friends that know how to make money and how to spend it wisely. Pick friends who will pull you up, not down. Pick friends who are more successful and smarter. Dropping old friends and making new ones is sometimes a smart move financially.
10. Work Hard: Financially successful people work their buns off to get where they are. Often when others are eating, watching TV, or sleeping, they are busy improving their skills or working multiple jobs.
Conclusion
The ten things that I recommend above are not easy. If they were, there would be a lot more debt free, successful people. I recommend them because I have done each of them and know first hand that they work. Nevertheless, you alone are responsibility for your life. Be assured, what you decide to do with it determine your quality of life. If you want to mess it away and achieve little, that is your business. However, if you want to achieve something worthwhile, you must be prepared to get started, and work hard to achieve it.
About the author: Jimmie Burroughs is a motivational speaker and author who has been involved in teaching Christian Personal Development for more than 30 years. There are hundreds of articles to help you on this website (Website Contents) in your personal growth.
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