Linda Chavey writes about how to change your lifestyle habits in order to eliminate debt.
Trying to dig out of debt can be a monstrous and overwhelming task for many.
There are many methods to this process. One method may work for one person but not for another.
One step is crucial to living a debt-free lifestyle.
The first is to realize how much debt you have. Write it down. Make a list. Spreadsheets in Excel are a great way to keep track of debt. Excel allows you to edit and pay-down your debt, seeing results in a start-to-finish format. Others may like to use pen and paper. Whatever works for the individual. Include all debt such as credit cards, student loans, car loans, mortgages and any other loans. Anything that is not a recurring monthly expense should be included on this list.
At the same time, making a list of recurring bills such as insurance, cable, phone, water, sewer, and the like is helpful when attempting to trim excess expenses. This will allow you to see how much you actually spend on an annual basis on such things as cable and internet. I cut my cable/internet/phone bill from $157/month to $70 month by using this method. I disconnected my home phone, downgraded my cable to basic services and bought a used cable modem on Craigslist for $10. The monthly cable modem charge was $7 so I recouped my money on this purchase in 1 1/2 months. I've been called cheap, which is ok but I have priorities for my money and I do not care to spend it on things that are of little or no value to me. The expanded, digital cable had way too many programs that were not in my value system. I would come home to find my children watching programs that were just not appropriate for our lifestyle. That is a far different subject!
Back to Debt:
If the debt cannot be acknowledged by the individual that created it, it will be nearly impossible to climb out of debt. Even if the person does obtain a debt-free existence without following this step, they will end up right back where they started: IN DEBT. Analyzing, altering and obtaining a new spending lifestyle is critical to the lifestyle.
Over the years, I have found that this step is the hardest for people. They are afraid of what they may find so they ignore, deny or hide their debt. Realization is the key to this crucial first step. Yes, it is scary but if a person is seriously ready to change their life, this step is necessary.