Debt? What debt?

Anyone that has ever dealt with an addict know’s that the first step in getting help is recognizing and admitting that you have a problem. Getting the necessary help to break the ‘spending more than you make’ addiction is no different. Until you realize you are in the middle of a trap you won’t be successful in getting out. That goes double for couples. I often talk with one spouse looking for advice on how to get their finances back on track when the other spouse doesn’t think there is a problem; usually, this won’t work. In order to get control of your finances you first must admit that your finances are out of control.

Let’s Define Help

Once you recognize there is a problem, there’s really only one way to fix it. A lot of people think that by using a debt management service their debt will magically disappear overnight. It doesn’t work that way. The service’s these companies provide are things that you can do yourself. They will charge you a lot of money (which you don’t have because you are in debt) but they can’t magically make the debt go away. For the most part, they will set up a payment plan that you will pay to them. They will tell you not to pay any of your debts, and let them take care of it for you. After a few months of you paying them, they will try to make a deal with the credit card company to settle your debt for less than you owe. Sometimes they will settle, sometimes they won’t. In the meantime, your credit is trashed and you keep getting phone calls from some very irate collectors. That is not the sort of help you need.

The Right Kind of Help

Personal finance is really very simple, but it isn’t always easy. The first thing to remember is that you didn’t get into your current situation overnight, and you won’t be able to get out overnight. What you need to do is promise yourself that you are finished living beyond your means and then get really focused on eliminating debt. Here is the key to getting out of debt. Ready? You have to live on less than you make! That’s it. When you spend less than you make you can save for emergencies and pay off debt. Sounds easy? Well it is simple, but it’s not easy.

Winning Requires Sacrifice

Depending on your debt situation, you may have to make some drastic changes in your lifestyle to really make a difference. I can’t tell you the number of people that say they are fed up with living paycheck to paycheck, but they aren’t willing to give up cable! Look at your current situation and realize that you are where you are, because of your decisions. Now make some different decisions. Living the same way you have always lived will guarantee you keep getting the same results. Cut off the cable, cancel the newspaper subscription, stop eating out, no more $5 coffee and the most important thing – get on a budget. Decide where you are going to spend your money before you spend it. If you decide on purpose what you are going to do with your money you have no one to blame but yourself if you aren’t successful.

Not happy with your finances? Are you worried about how you are going to make it during retirement? As long are you are ready to make some real changes and admit that you have a problem, it is not too late to get out of the trap.