Paying down significant debt can seem like such a daunting task. Sometimes you wonder if it’s worth it. I mean. A good portion of our country is in debt. But I’m going to tell you the other side is sweet. And, I guarantee you can pay it down too. Some things will snag us up if we are not careful.
It’s the same reason why New Year’s resolutions don’t work. The pain of adhering to them will pull you away from them. Sometimes any little hiccup will give you an excuse to jump ship. One year I made a conscious effort to start working out at a gym. I went five days a week after work and Saturday. From the beginning, I decided to give myself a break on Sunday. Then one Saturday, something came up, and I couldn’t go. I never went on Saturdays again.
‘No big deal,’ ‘Five days a week are better than none.’ Then I hurt my knee and instead of going and taking it easy, I decided to, ‘take a break and let my knee heal properly.’ Well, I never went back. What was the problem? The restrictions I put on myself from the beginning were more than those I wanted to adhere to. It wasn’t fun. It felt more like a job rather than something from which I would benefit. The same thing happens with budgeting, especially if you love shopping and spending.
The pain of giving it up is more than the end goal of being debt-free. I don’t believe it is entirely our fault so many get into debt. Our society is structured to put us in debt. It will take a ton of willpower and some tricks to drag yourself out. If you can supply the willpower, I’ll keep giving you some tips. Here are a few.
Budgeting Tips; Budget Slowly Without Making It Too Tough
Everyone seems to take a little different approach to budgeting the first time. If you’ve never put yourself on a budget, it can be a big shock to your system. Not like jumping into an ice-cold pool, but more like gritting your teeth when you see a neat new gadget just came out, and you can’t have it. If you were on your old pattern of spending, you’d already have it. If you make your categories broader and more general, it may take a little of the pain away.
The critical factor is to make sure your top priorities get covered. You should be saving a bare minimum of 10% of your income off the top of a nest egg fund. Then an additional 10% of your income to pay down any debt. This is over and above the monthly minimums of your debt payments. Making the minimum payments will only keep you in debt. I’d recommend living frugally for a while and working hard at paying down debt. But, I know, that if something is too painful, it won’t get followed.
Budgeting Tips; Make Sure to Incorporate Some Treats into Your Budget
I’ve always built some small treats into my budget. These little treats are something to look forward to, and it doesn’t make the thought of budgeting like a prison sentence. I’m an education junkie. I love learning. As a side note, that has always been my problem working online. I’d rather be learning rather than working. Anyway.
I’d put some money, no matter how little into educational books or cassette tapes to listen to in my car. I started in the early nineties before iPods. The internet was young, and we all listened to cassette tapes or CDs. If I remember right, my budget was tight. Think I had to save for two paychecks just to afford one product. I’m grateful for these tapes because not only did I enjoy listening, it was my gateway to the self-help world. Zig Ziglar was my favorite. As my debt got paid off, my budget for treats got a little more substantial. I still stuck with the same theme though, self-help and motivation.
Budgeting Tips; Give Yourself the Freedom to Move Some Numbers Around
Things will come up. Life just happens sometimes. There will be times when you will need to pull a little money from one category and put it into another. Just make sure you never spend more than you make. Make sure you pay the rent. Make sure you keep the lights on. Make sure you fulfill the two significant categories. The two most important groups are ‘paying yourself first’ (Your nest egg fund) and ‘paying off your debt fund.’ After that, don’t ever be ashamed of having to move funds around a little. Just always be honest with yourself. Fix the broken part of your budget and stay on track.
Don’t get yourself frustrated on one little slip. Keep moving forward. You will get there. There were times when my car would break, or it was a friend’s birthday, and he wanted to go out on the town. I did it. I got the parts and fixed the car. Then on the very next paycheck, I put myself back on track without any shame, just perseverance.
Budget Tips; If Your Budget Isn’t Working, Change It
If you get a couple of months in and you still see consistent problems month after month, maybe it’s time to change the budget. If you consistently show a left-over amount in one of your envelopes month after month and you cut it too short in another, maybe move a little more over every month.
If you consistently see an overage in one envelope, don’t be afraid of bumping up either the nest egg fund or the debt pay-down fund. Money is always better spent in those two areas than on that new watch you have your eye on. Unless you are entirely debt-free and you’ve had your eye on that watch for a while now.
Well, in that case, I say. Everyone needs to know what time it is, right? Just go for it. If you’ve worked hard paying off debt, you have probably learned a big lesson about money. Just getting your mind right about money and having the willpower to pay down debt entirely is a massive gift in itself.
Paying off debt, learning to work within a budget, and getting your mind right about money will put you years ahead of so many others in this world. Just take it slow and move at a comfortable pace. Be consistent and don’t sweat the small setbacks. We’ve all been there.
Thanks,
Kevin