How to Fix Your Relationship With Consumer DebtFeb 21, 2019
Do you treat your consumer debt like a shameful secret or a long-term love affair? The truth is, we all have a different relationship with our money and our debt. And, if you want to improve those relationships, you’ll need time, commitment and love, just like all your relationships. And what better time to work on your financial relationships than February?
How to give your money (and consumer debt) the attention it deserves
Life is busy, and sometimes it’s easier to set things on auto-pilot for a while. While that may be okay for some things in your life, it won’t work for your finances. Here’s why:
- Ignoring your financial concerns such as personal debt, poor spending habits or affordability issues doesn’t make them go away. In fact, it can actually increase money stress, making you feel like you’re always putting out fires.
- Mindless spending without a budget or plan almost always leads to higher debt and leaves you unprepared for emergencies.
- Without solid money goals, you’ll have no focus to pay off your debt balances, save up for that vacation or plan for long-term financial goals such as retirement.
You don’t want another year to pass while you sit on the sidelines, right? Of course not! Here are 3 ways you can make positive money changes and show your finances some love this year:
- Pay attention to your money by tracking it. Following a budget is the best way to keep track of spending, ensure your bills are paid on time and plan for unexpected expenses. Use our budgeting worksheet or a budgeting app like this one to get you started. Keep it simple and revise your budget when you need to.
- Repair those money leaks. If you’re left scratching your head at the end of each month, wondering where your money has gone, you may have a few money leaks. Go over your bank transactions from the past month and pay special attention to those miscellaneous purchases. How much are you spending outside your budget? Check out this blog post about how to be more mindful with your spending.
- Say no to consumer debt, especially credit card debt. If you already have credit card debt, resolve not to accumulate more of it. Make a plan to repay those outstanding balances by choosing a debt repayment strategy, consolidating your high-interest debts into a lower interest loan, or speaking to a debt professional. You can also compare your debt relief options using this handy calculator.
3 Bonus ways to show your money some love
Follow a finance blogger for daily inspiration. Kerry K. Taylor’s blog, Squawkfox offers readers tips on thrifty living, debt repayment and money saving advice.
Open a savings account. Pay yourself first by setting up direct payments to a high-interest savings account each payday so you can grow a reliable emergency fund and stop turning to debt.
Set debt relationship goals. Without solid goals, your debt resolutions are just a wish. They need to be Specific, Measurable, Achievable, Realistic and Time-based in order to become reality. Watch this video from the FCAC to learn about how to set SMART goals for your consumer debt.
What steps will you take to make your consumer debt a priority this month? Join the conversation on Twitter using the hashtags: #LeaveDebtBehind #DebtConfessions #DebtTips