Getting out of debt starts with a decision!
I know this is not just an understatement; it’s so obvious we can’t ignore it. How many of us have decided to quit smoking, or lose weight or exercise more? Always with good intentions, these decisions we make at the beginning of a year, a new possible relationship, or maybe the end of one, or no reason at all require determination, execution and a plan. This can take the form of a change of schedule, or a change of habit or both.
That is usually the hardest part of it.
Some of us make out OK on some of these “hard” decisions, some not. I found it easy to quit smoking 25 years ago; it took looking at an ashtray in my second month of pregnancy with my second child. My previously hard-to-change habit was done, finished, over with instantly. I never looked back. Not so easy with the decision to exercise more. I even got a dog to have an excuse to go out and walk. Although she’s still doing great at 15 years old, it’s not because I walked her regularly. Some of my excuses were always related to time constraints, being a working mom, long hours at the office, and the list goes on. A friend quit drinking coffee one day over 10 years ago, realizing that the coffee was adversely affecting his health. He was in the middle of drinking a cup, dumped it out and that was it. For some others it’s losing weight. Recently the actress Kirstie Alley had tremendous and well published success, embarking on a promotional plan to help others do the same. Yet how many times have we made good resolutions only to try again, and again.
What makes getting out of debt different? - Nothing at all.
Debt comes about because of bad spending habits and bad or inadequate money management. Period.
Getting into debt is usually a slow process that can take years. You get one credit card application in the mail after another; you send one in promising yourself you’ll never borrow more than you can pay in a month. One day you’re at the mall and your 10 year old daughter sees a pair of jeans she has to have. Hers don’t have that torn and worn look everyone else has and she pleads, and wins. You think you can handle the $50 and promise yourself that’ll be the only time. The following week your car overheats, the mechanic says it’ll cost $100 to fix the thermostat, replace the coolant, and there you go, you’ve sunk below your earnings for the month.
What is hurt more than anything else at this point is not your account. Frankly you could have handled it next month with some determination. What suffers most here is you. You decided, ever so faintly, quietly in the back of your mind, that it was OK, as you tuck that little rectangle of plastic back into its safe spot in your wallet, ready for the next time you think: “wow, that was easy, I will pay it all off soon enough”. Or maybe you don’t even think about it at all, blocking those faint thoughts of “no, I shouldn’t” or “that was not what I had planned when I got this” until they are so quiet you don’t hear them anymore. Only your attitude is different now, and it’s become sort of OK, but it really never was.
Sooner or maybe a few years later, you’re amongst those of 43% of American families in America who are spending more than they earn and are the proud owners of a conservative average of $10,000 in credit card debt per household.
In 2004 the average wage earner took home $27,040; the average salary was $36,764. At that rate they won’t get out of debt for some 30 years paying minimum amounts unless they win a lottery, file for bankruptcy, or change their spending habits.
The successfully made decision will rest on two factors: a reward or positive outcome from having carried out the actions required to make the change and the corollary, the adverse circumstance for not doing so. If you managed to save your target amount on any given week, you should give yourself a reward: a movie, something you like, a treat (keeping within your budget of course) If you don't, you don't get the reward. Simple.
These two factors should make it easy to point yourself in the right direction and start to take the necessary steps toward improving your lot.
Ms Pearson is President and CEO of Prosperity Consultants International. She has been a business owner, specialized in Debt Settlement, built a fast expanding company, then moved to consulting.
