Debt Management Explained
Debt Management Explained – Your Reasons
Some of you may be very happy living with a lot of debt hanging over your head. Some people were raised this way even as a child and know no other way of life. But most people would like to stop the continual worrying about paying the bills and be able to enjoy life. No one likes to constantly deprive themselves because they can’t afford to do something fun once in awhile. And most people do not like having to deprive their families either. Therefore, a very important part of your plan is to formulate your reason or reasons for wanting to be debt-free as an incentive for actually doing it. Yes, you first have to decide you want to live debt free. But, second, you need a really good reason to change your life style. So let’s decide where you are going in life and what you want from your life.
First, just wanting to be debt-free is not usually a good enough incentive for most people to work so hard. That is, telling ourselves that if we lose more weight we will live longer is not nearly as good an incentive as telling ourselves that if we lose that weight we will become a beautiful model, make scads of money, marry a handsome man, and live happily ever after. Just saying that you will not have to be worrying all the time about paying bills is not nearly as good an incentive as thinking of how we can use that future left-over money for our own fun.
So what would you do if instead of paying out every cent on bills, you had an extra $500 a month to spend? The possibilities are endless, but you must decide on what you would do. To help you, let’s consider some possibilities.
With an extra $500 you could buy a lot of essentials like groceries or eye glasses. But you could also take a camping trip to a national park, buy discount tickets to Hawaii or Mexico, buy a new appliance or piece of furniture you have been wanting, take a college course, start a home business, buy General Electric stock for your future security, take a kayak trip, take up a new sport like golf or tennis. Now multiply that $500 a month by 12 months and think what you could do with an extra $6,000 a year. You could remodel a couple of rooms in your house or make a down payment on a new house, take a trip to Europe, pay for a lot of your child’s college education, invest it for your own financial future.
In other words, you need to create an incentive for yourself in order to last through one whole year of extra hard work. You need an incentive that is just right for you. Granted, what you consider an incentive and what your spouse considers an incentive could be two different things. If this is the case, don’t get greedy. That extra $6,000 a year (or more) should be able to get you and your spouse and the kids some extra fun in life. That’s serious debt reduction.
Now, write this incentive down. In big, bold letters write HAWAII and post this on your refrigerator, the thermostat, mirrors, on your desk at work, on the dashboard of your car, everywhere you will continually be reminded of what you are trying to accomplish. Just like putting the “fat” picture of yourself on the refrigerator in order to keep on your diet, you need the continual reinforcement this incentive will bring you. And even a great incentive cannot keep you going through years of trying to pay off your debts, but sometimes even a small one is all it takes to keep you going through just one year. And that is the important part, to stick to your cost cutting and increased income for a whole year.