How I Brought My Debt Under Control

Sometimes, debt sneaks up on you when you least expect it. You think you’re doing all right, but suddenly, you realize that your debt has spiraled out of control. For me, the wake-up call was realizing that, while my income hadn’t changed, I had more credit card debt, higher payments, and less available money each month. I was struggling. My spending habits were completely out of control. Here’s the good news: I’m a success story. I did manage to get out of debt and get my spending back on track, and you can do it, too.

Start with an honest, if painful, assessment.

Where has your spending really gotten you into trouble? Do you frequently make impulse purchases of items that you don’t really need? Do you treat your credit card as unlimited money when your bank account is running low? Be real and be honest with yourself. You’ll never get your debt back under control if you can’t identify the problems. For me, the biggest trap was technology. I fell into the habit of believing that I had to have the latest and greatest, whether it was a new phone every six months or a new computer every time mine so much as beeped the wrong way. Identify your out of control spending habits and make hard cuts.

Trim and downsize.

Yep: here comes the really hard part. If you really want to get out of debt, you have to be willing to make sacrifices. That means trimming away things that you don’t need and sometimes downsizing things that you think you do. For example, food is a necessity. Eating out two, three, or more times a week? That’s an unnecessary expense. Let go of the “Dunkin Donut factor” and learn to think lean and develop the mindset that your biggest financial goal is paying off debt, not acquiring more “stuff.”

Don’t forget to cut expenses.

Even “fixed” expenses might not be as fixed as you think. For example, if your contract is up, cutting your cable bill could save you $100 each month. Reduce your data package on your phone and commit to only browsing when you have wireless access. I went in and talked to my cellular provider and discovered that I could save $30 a month on my plan simply by switching my package—and all of that went straight to paying down debt. Another unnecessary expense was driving and parking tickets that I had not been on top of, which resulted in fines and higher insurance premiums. These needed to go immediately. I spoke to an experienced Monsey, NY traffic attorney who was able to minimize and get me out of much of the fines and surcharges.

Monitor your money.

I also learned that it helps to carefully monitor what I’m actually spending. Have you ever gotten to the end of the week with no idea where your money went? I’ve been there. Now, I write down every purchase I make and
look over it. A $10 stop for fast food one time isn’t too bad, but if I do that every day, it adds up—especially when I could be bringing leftovers from home for lunch instead. Actually being able to see where your money is going helps you understand your spending habits and make cuts where you need it most.

Implementing rewards is important, too.

When you’re trying to get out of debt, it might seem like you never get to have any fun. Spending used to be one of your favorite pastimes, whether it was a day out shopping or an evening out with friends. Building rewards into your system is an important part of staying on track to get out of debt. It’s just like going on a diet: if you never let yourself have any fun, you’re going to end up “cheating” or falling back into your old habits. I worked rewards into my budget. As long as I stayed on track the rest of the week, that reward was mine! Sometimes, it was a new release book that I really wanted. Other times, it was a date night out. You can design your rewards based on what works best for you. The trick is to use something that will motivate you to stay on track.

Getting out of debt is a challenging journey, but it’s worth it! When you reach the end, you’ll discover that a giant weight has lifted from your shoulders and you’re able to relax again. Once you’ve experienced debt-free living, you’ll never want to go back to your old lifestyle.