Change Your Lifestyle

Discipline is the key.

Debt consolidation loans and other debt reduction strategies can be effective tools to reduce debt when used appropriately. Too often, though, people who obtain debt consolidation loans begin to recklessly re-accrue the debt on the very credit cards and other credit resources they paid off with the loan, creating an even more tenuous financial situation for themselves. Now, they not only have to make the loan payment, but they also have to make monthly payments on the new debt they have begun to rebuild. Regardless of how you pay off your debts, you must understand the need to continue smart money management practices after you have paid off your debts to remain debt-free, and this requires a change in your lifestyle. If you don't change your lifestyle and alter your spending habits, you will again lose control of your own financial situation. Discipline yourself to maintain a debt-free lifestyle.

Like any other bad habit, bad money management and spending practices can be changed. Everyone can develop smart money management skills. Developing these skills is vital to becoming free of debt. The effort you put into cultivating these skills will pay off big as you work toward your debt-free goal.

As with so many other achievements in life, your road to financial recuperation is entirely up to you. Only you can discipline yourself to take the necessary steps to pay off your debts, and only you can decide if you are ready and willing to make the sacrifices necessary to get out of debt.
When you admit you have a problem and take responsibility for getting where you are, you have taken the first step toward practicing self-discipline. Though you need to have an overall concept of the big picture, stay focused on each step you must take to achieve your goal. Almost any mess can be cleaned up if you take it one step at a time. Keep a calendar showing payment schedules and projected pay-off dates. Post a to-do list and a progress chart. Refer to them often and stay positive.

Old habits may be difficult to break, but it’s not impossible to do. Plan your spending, and then strictly force yourself to stick to the plan. Only by creating limits to your spending can you successfully improve your financial situation. Most of us find it difficult to remain self-disciplined, but if you believe, you can achieve.

If you can't control your credit card spending

Your use of credit cards must be curtailed if you want to get out of debt. If you find your credit cards are too great a temptation, get rid of them. Make a celebration out of cutting each of them up, and pat yourself on the back when you finish the job. If the convenience of carrying credit cards is a draw for you, start using a debit card instead. Like a credit card, a debit card is a plastic card that you can use to make purchases, without the interest and debt, since you must have the money available in the debit card account to use it. PIN-based debit cards require you to enter a “personal identification number” (PIN-usually four digits) to complete a purchase. Signature-based debit cards require you to sign for each purchase.

Change your financial habits

Obviously, if you are dealing with financial problems, you must have made some poor spending or money management decisions in the past. Now is the time to evaluate your spending habits and change the way you manage your money.

• Cut back on spending.
• Stop using credit cards.
• If you have to use a credit card, charge only what you can afford to repay when the monthly statement arrives.
• If you can’t control your credit card use, cut up all of your credit cards, with the exception of one to use ONLY FOR EMERGENCIES.
• Get a debit card.
• Make a plan to pay all credit bills. If you need help creating this plan, call one of the reliable non-profit credit counseling agencies in your area.
• Make more than the minimum payment required each month.
• Contact your creditors if you know you won't be able to make payments. Explain the situation; some creditors are willing to make payment arrangements you can comfortably manage.

If you can't do it by yourself

If you don’t think you can discipline yourself and resolve your financial situation on your own, a Debt Management Program may be the best option to help you get out of debt. Many creditors might lower or suspend interest charges if you are enrolled in a Debt Management Program.