Breaking the Cycle of Debt

With a new year comes the thoughts of improving the different areas of our lives.  For many, finances is high on the list but low on the level of success.  Hundreds, thousands, even millions of individuals are in debt these days. If you are in debt, the first thing you need to know is that you are not alone with your struggles in the breaking the cycle of debt. While that may not be an answer to your debt problem, it is comforting to know that you are not out there alone in your debt situation. There are many ways to break the cycle of debt and begin a journey into financial security and wellness.

Too Much Outgoing Not Enough Incoming

This seems to be a no-brainer, but if you constantly have more going out then coming in you will struggle with debt.

One of the ways to resolve this is to increase your income. If this means that you have to give up something, then you have to give up something. The end goal is to get out of debt and you may have to give up some free time to work extra hours or watching your favorite show on cable.

With the Internet and many ways to make money, finding ways to increase your income is not as difficult as it seems.  The key is finding a solution that works for you and your family. There may need to be some short-term discomfort for long-term luxuries.

Cut Your Cost of Living

This is uncomfortable for many.  Take a good look at where you can cut costs. If that means making lunch every day and cutting out that expensive coffee, you will be surprised how much money you save at the end of the month. I have shared before how when my family goes out to eat, we all drink water instead of soft drinks or tea.  For a family of five, this is a savings of almost $10, if not more.  Make sure you have a budget set in place. Set aside some fun money and at the end of the month when it is gone, no more impulse buying or fun money until the next month.

Set New Habits

Getting into debt is simply a bad habit or returning pattern.  If you are intentional about it and recognize it, you can create new and healthy habits.

* Set a budget
* Journal your spending habits
* Have an accountability partner when you feel like splurging
* Cut down and/or eliminate extras: dining out, shopping splurges, subscriptions, etc.
* Begin saving something – even if it seems like a small, insignificant amount.