The very mention of debt management brings to mind drastic measures such as cutting up all of your credit cards, selling off half your furniture to pay bills, or attending debt management support groups. In reality, your debt can be handled with small, simple changes in your lifestyle.
To begin thinking about debt management solutions, get out a calculator and figure out what you spend every month on coffee. Now, add to that the amount of money (approximately) that you spend on take-out lunches every week, or every month. Do you take the car when you could easily have walked? That’s more money coming right out of your car’s tailpipe – especially as gas prices continue to soar.
People who do the best debt management are those who make simple little choices every day. They’re the people who pack a lunch to bring to work, walk or ride a bike instead of driving everywhere, resist impulse buying, and pay cash as much as possible to avoid accumulating debt. Your debt management solution could be as easy as canceling unnecessary magazine subscriptions, or only going to the movies every month instead of every week.
Your debt management solution should be something you can sustain for a long period of time. It’s like going on a diet; if you starve yourself, you’re going to binge. Keep a note in your purse or wallet that says “baby steps” to remind you of the small changes you intend to make on your path to debt management.
A good place you can start is by paying with cash to figure out a reasonable budget, then you can set financial goals and work towards achieving them. Then you can set up an automatic savings plan (or an automatic payment plan if you’re working on your debt), see a debt counselor or certified financial planner, and then plan for your retirement.