Here’s your guide to managing the debt you built after Christmas (don’t worry, we’re in the same boat)
Credit cards. A lot of us have a love / hate relationship with these powerful pieces of plastic. We love the convenience they provide when it comes to buying the latest Yeezy shoes and we hate how easy they result in an everest-sized mountain of debt.
The Christmas period is one of the worst for spending and for this reason. Here are three steadfast tips on how to change your financial reality:
1. Stop ignoring your finances
How were you with money growing up? Were you educated on the topic? Was money talked about? Or was it ignored?
If you came from a family that avoided the topic of money, you may find that you have carried that over into adulthood. The problem with this is that ignoring your finances does nothing to change them. If you would like something different, you have to be willing to take a look at where you are today. Not from a place of judgement but rather from the place of acceptance and proactivity. Once you are clear on how much debt you have, work out how much you would need to pay towards your credit card debt each month to be out of debt in 12 – 24 months. If you have more than one credit card to pay off, look into the possibility of consolidating your debt.
2. Start a 10% account
Take 10 per cent of every dollar that comes in and set it aside. Never spend it. You can keep it in cash or in a bank account, whatever works for you. They key thing is – never spend it. You’re probably thinking, “Why would I set aside money to never spend when I have all this debt? I’ll wait till my credit card debt is paid off and then I’ll set aside 10 per cent.” Don’t wait until you’ve cleared your credit card debt to start using this tool. Start today. Watching this money grow will serve as a reminder that you are valuable and you always have the ability to generate more money. Having money not only gives you a sense of peace, it is a huge contribution to every area of your life.
3. Stop judging you
Do you feel sick to your stomach every time you get your credit card statement? Does the litany of self-judgment start as you read through it? The next time you start to judge yourself for your current financial situation, try asking this question, “What’s right about me that I’m not getting?” Know you’re on the path to clearing your debt and that you’re willing to do whatever it takes. You are not wrong, stupid or irresponsible.
Owning a credit card is not wrong; you can use it to your advantage. Do your research properly and find out which credit card will be beneficial to you and your business. For example, if you travel quite a bit, there are credit cards that allow you to build up frequent flyer miles.
Credit cards are not the solution to a desperate financial situation. But they are not the cause, either. Be aware of your finances and commit to changing them and you should be fine.
Is not the time to create a new financial reality? Join Simone on her 1 year program Getting Out Of Debt Joyfully here!