3 Surefire Steps Towards Debt Elimination
“Debt has been sold to us so aggressively, so loudly, and so often that to imagine living without debt requires myth-busting...We’ve been sold debt with such repetition and with such fervor that most folks can’t conceive what it would be like to have NO payments.”—from The Total Money Makeover by Dave Ramsey
Debt somehow became ingrained in our lifestyle, that modern living is almost synonymous with a life riddled with debts, various loans, bloated credit card bills and more loans. As if, this kind of lifestyle has become the norm, rather than the exception. The current global financial crisis should give us a wake-up call to turn around and take personal financial management seriously.
However, first things first. How do you eliminate your debts, and start your journey towards financial freedom? Here are three surefire practical steps that you can immediately take:
1st Step: Consolidate all your debts
The first and crucial step in debt elimination is being able to consolidate your debts and other unpaid bills and loans. You need an expert to guide you in this matter. In your own, you can make a list or an inventory of your debts’ sources and create a hierarchy of priorities based on the face-value amount, interest rates, and due dates. This list will aid you and your financial advisor to negotiate with your creditors. In this case, you might want to begin acquainting yourself with your debtor’s rights so that you know how and when to leverage with your creditors.
2nd Step: Delay your Gratification
While you have started consolidating your debts and paying your creditors, stop making unnecessary purchases. You will probably noticed by now, if you have made an inventory of your debts, which most of your purchases were actually things that you can live without; things that you do not need or things that can actually wait. We always want things now, and thus have compromised greatly our financial health. This is one the perennial problems of the modern society today, we want everything to be quick or instant. We want to acquire things sooner than our neighbor that we ignore the possible consequences of these hasty decisions.
3rd Step: Impose Self-Discipline and Decide with your Head
Hear Dave Ramsey’s advice on this:“To think that the handling of your personal finances is merely a matter of math control is naive. You must get better control of all aspects of your life. Until you do, [even the best advice] will have little effect but will instead be neutralized by the other habits in your life.”
I couldn’t agree more. I think, if anyone really wants to have total control over his money, he/she needs to start using his/her head in any financial decision. Impulsive buying and other wrong money-related decisions stemmed from the emotion. We were carried away by the new car design, or mesmerized by the latest laptop we saw over the net, and so without thinking about the possible consequences, we went on. Financial discipline begins in the head. When we think through on any financial decision, we reinforce self-discipline. Begin today, and set yourself free from the burden of debts!
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2 Comments so far:
Hi Ronnie, this is my first visit here. You're right about debt being so ingrained in our psyche. I wonder if you've seen the free online movies Zeitgeist and Zeitgeist Addendum? The latter does a great job of explaining debt and how our economies depend on it. I wonder what you think about it?
Personally, I believe that our relationship with money and our experience of debt have very deep philosophical and spiritual underpinnings which are largely ignored or unrecognized. As a result, we let our anxieties and fears about debt and the social stigmas associated with it drive our actions. It makes the point in your post about developing a powerful mind and attitude an especially important one.
Happy Friday to you! Enjoyed reading your blog. Keep up the good work! Clicked for ya as well ;)
Kas