I honestly thought when I first started blogging that I would be out of debt in a year or less.
Boy was I wrong.
There is a learning curve once you have the initially “ah ha!” moment. You know the moment when you finally realize you have to change your habits.
Bad Money Habits Take Time To Change
Even once you have your “ahh ha” moment, it takes time to change all the bad habits that got you into your mess. For me, once I came clean with my Dad, I never day traded again. Never will. I used to have urges to trade, but even those have faded now. I wouldn’t risk the traction I’ve gained in the last year or so. I think I’ve matured in that aspect.
The Second Stage: Cutting Spending
The first biggest challenge was reducing my spending dramatically. While at first all I wanted to do was think about how to make more money, after reading a lot of great pf blogs, I knew it was much more important to cut my spending first. Making more money could come later.
This second stage, the cutting stage, is hard. I dealt with a lot of guilt for every purchase that I had to make (groceries, etc). It took me a long time to be “OK” with spending money again. You can take this stage too far. But the cutting stage must happen.
The Last Stage: Making More Money
For a lot of people, myself included, this is what we turn too first. “How can I make more money so I don’t have to change?” Well, you don’t say the “have to change” part, but it’s there.
Making more money could mean a second job for some. It could be asking for a raise (it doesn’t hurt to ask, right?). It might be picking up cleaning jobs on craigslist. For the small business person, this means growing your business and trying to reduce expenses while increasing revenue.
Get Out Of Debt in 3 Steps?
It’s not rocket science, but it ain’t easy.
- Realization that you have a money problem
- Cut expenses as much as possible
- Increase your income
The whole “what debt should I pay first?” and the debate over debt repayment methods is all secondary. If you can’t do the first 3 steps, none of it matters anyway.
{ 4 comments… read them below or add one }
Getting out of debt seems to be alright for banks and auto companies no? It’s just not easy for the people that buy the cars and have the bank accounts:)
I always did well with number 3 on the list, which I always place at number 1. I spend a lot of time on number 2, but that never amounts to much. Number 1 does not have to be that much of a big deal — as long as you are make sure that you take care of the underlying issues.
Always did well with no 3 you say? Really, any tips?
Those three tips are wonderful but most of all we need determination. If we are not determine that we want to be debt free and so we are setting this goal and working towards achieving well all our efforts will be for naught.