Get on a Debt Diet
If you want to sustain the results you've achieved from your debt elimination program, a debt diet might be in order. Here are a few simple steps to trim your financial waistline.
Phase I
The first phase of your debt elimination diet should take about a month to complete. It involves four steps:
- Be honest with yourself. Do you know how much debt you have? Do you know how much it's costing you each month to carry that amount of debt? Even though the answers to these questions might be depressing, you can't conquer your debt if you don't know the first thing about it. Sit down with your statements and figure out what you owe and how much it's costing you.
- Record spending to find extra money to devote to debt. Cutting back on unnecessary expenses isn't as hard as you think. Keep track of your expenditures to identify areas of needless spending.
- Get on the $10/day program. You might not think paying $10/day toward debt elimination will make a difference, but it does. In fact, you can pay off $8,000 of credit card debt in just three years on the $10/day program.
- Put a moratorium on spending. Small changes produce big results when it comes to eliminating your debt and cutting back spending. Try getting yourself in the habit of only paying in cash. It's easier to set limits this way.
Phase 2
The second phase of the debt elimination diet involves more detailed strategies and focuses more on long-term financial goals. Here's what to do:
- Make a spending plan for the month. Make a budget that is realistic so you will be able to stick with it in the long run. Remember the purpose of the debt diet is to help you sustain the success you've achieved with debt elimination.
- Boost your income in creative ways. You might have to take on a second job temporarily or even sell some of your assets, but boosting your income is a critical part of overcoming debt.
- Raise your credit score. Always pay on time, and pay more than the minimum to keep your credit score up.
- Understand why you spend. If you have a spending problem, and most debt elimination customers do, you need to figure out why you really spend. Are you trying to buy a lifestyle that is beyond your means right now? Do you spend when you're lonely or sad? Figuring these things out may take some introspection, but it will save you money. Discover if you are in debt trouble on the next page.
