Not in a rude “you should do this or you’re a schmuck” kind of way. What I mean is that there are steps you can take immediately to reduce your debt even if you don’t think so. Just getting started will give you a mountain of confidence as you reduce your mountain of debt.
Like I’ve said before, driving 10 miles out of your way to save 3 cents on gas won’t help you get out of debt. It’s the big stuff. The gristle. The fat. Ever notice meat when after you cook it? The fat is easy to see and easy to lop off.
Step 1 is to cut out the big items. For me and my household that’s eating out and trips to the bookstore. We also cut out cable television and movie rentals. And, thankfully, our vehicles are paid off.
Step 2 is to have a plan. My wife and I discussed this just the other day. Yeah, we say we’re going to throw down on our debt but are we really? No. We never had a plan other than “yeah, let’s put a bunch of money towards our debt.” It needs to be more than motivational mumbo jumbo. More than words on paper. Make debt payments your first option not the last thing you think about at the end of the month.
Step 3 is to push away from financial cliffs. That means, first, saving for events you know are going to happen throughout the year. Funny how Christmas seems to catch so many of us off guard. Same could be said for anniversaries, birthdays, and other known dates.
Step 4 is to stay motivated. Ok. Now you can bring on the positive mumbo jumbo. One of the hardest psychological aspects of paying off debt (for me) is knowing the money could be going towards something else—savings, a vacation, the ability to get out of a dead end job. That’s why I advocate having a tangible goal at the end of the debt. Maybe you’ll be able to take a vacation. Or quit a job. Or travel more. Pick something that motivates you. Then press on.
Have any other suggestions? What’s been your biggest debt reduction hurdle?