Living with debt can be stressful, and once you are in debt, it’s hard to get out of debt. The average household has an about $132,000 in debt, which includes mortgages, and the average household with credit card debt has balances totaling about $16,000, according to the American Household Credit Card Debt Study.
When you don’t have enough money to pay the bills and you continue to accumulate debt, it becomes a heavy burden. Getting out of debt and staying out of debt is not an easy thing to do. If you want to get out of debt, it’s going to take sacrifice, discipline and hard work, but in the end it will be worth it. Once you get out of debt, that burden of debt hanging over you will be gone, and you’ll have a financial peace of mind. You’ll also be able to take that money that was once going toward debt and instead use it to do things that are important to you and your family, because life is about enjoying things that matter most.
Here are four important steps to help you get out of debt so you can put yourself in a better financial position. This is your year to get your finances in control!
1. Fix the Root of the Problem
The only way to take control of your financial life is to fix the root of the problem, which is to change your spending habit and to stop living beyond your means. Avoid adding to your debt and don’t buy things that you don’t need. You won’t be able to get out of debt if you keep adding to it. If you change your spending behavior, you’ll be able to live without financial stress and have a much richer life.
In order to get out of debt, you need to get the whole family on board. If you and your spouse aren’t both committed to working together to get out of debt, then it’s not going to work. You both have to want it. This Total Money Makeover book by Dave Ramsey has helped thousands of families get out of debt and has given them the tools needed to get their finances in order. I recommend that if you are serious about getting out of debt, then read this book.
Additionally, telling your kids about your goal to get out of debt will help so they understand why you won’t be able to spend extra money on activities or outings at this time. Once you are out of debt, then you can save up and do some of those things you’ve wanted to do as a family. But remember, you don’t have to spend lots of money to do fun things together as a family.
Once you get real about your debt, then you need to figure out how much debt you really have.