Debt

How do you get out of debt?

Well, the best way I found was through my own experience. When I was younger I had little regard for money and that was my biggest mistake. What I earned I spent. What I didn't earn I spent! I was spending money I didn't have, but at the time I didn't think of it like that.

It was about three years down the road, after paying the minimum payment on my cards every month, that I suddenly realised I was getting nowhere and my debt was mounting. Someone suggested that I take out a loan to pay off all my credit card debts, and then once the loan had been paid off I would be debt free.

In my enthusiasm to get out of debt, I took out a personal loan over 5 years and cut up all my credit cards. Big mistake! After a few months of plodding along nicely, one of my credit cards that I had destroyed had expired, and a new one came through the post. What I should have done was cancelled the cards with the credit companies so there would be no chance of another one coming along.

All of my resolve to get out of debt evaporated and before I knew it, I was up to the limit on my credit card. I was back to square one.

My saviour, believe it or not came in the form of a self help book. I started to read it with total scepticism. But what I read made sense. I had to change myself and the way my thinking was programmed before I could change my financial situation.

I learned that if I wanted to get out of debt, I had to become more disciplined. The first thing I did was to control my spending. At first, it was hard, years of bad habits are hard to break. I started to deal only in cash.

Every month, I would leave the money from my wages in the bank to cover the mortgage, bills and loan, and then draw the remainder out in cash. I had an envelope for all other expenses and divided the cash between them. I had a spare envelope that was for any 'extras' that may turn up unexpectedly.

This was the envelope I used to build up my cash fund. If I had any spare money it would go in there. I had boot sales for unwanted items and the money I made went in the envelope. I got an evening job to top up my income and the money went into the envelope.

It got to the point of obsession. I would look forward to the challenge of finding reduced items in the supermarket and clothes in the sales. I managed to clear my credit card debt and pay the loan back early. I was free!

This was many years ago, but I can say hand on heart, I have never been in any debt since. I have paid my mortgage off, paid cash for new cars and always have a healthy bank balance. I would never want to feel as helpless and miserable as I did back then.

You see what I did was change my way of thinking. I respect money now. I spend what I can afford and no more. I sleep well at night knowing that I owe nothing. It really is a great feeling, so if you want to get out of debt, try these strategies. If you don't feel confident enough to tackle the debt yourself, try non profit consumer credit counseling. They will help you set a program to follow and will even negotiate some of your debts for you.