Become a Student of Your Finances

Dealing With Debt – Part 7

What’s the best method for me to get out of debt?

Don’t be fooled; there are many ways in which a person can get out of debt.  Just do a search and you’ll find methods and processes, seminars and conferences that say they offer a solution.  The only solution I want to offer you or make you aware of is the one you put together yourself. If you want to do something bad enough, you’ll find a way to do it with or without a class on the subject.

What They Are Not?
The two ways I want to offer are not the typical methods you’ve heard.  “Cutting up your credit cards” is the most common. There are many who’ve tried this and just ruined a perfectly good credit card.  They then find themselves applying for a new one or replacing the one they just destroyed. Cutting up your credit cards will not get you out of debt.

“The snowball method” of paying off your debts.  This method alone isn’t enough to get you out of debt.  Using the snowball method gets you going just enough to free yourself from a payment or two just to get you some room to start a new payment.  

Not What You Think
I have two ways we use to reduce our debts.  I remember the day my wife, Pamela, called to tell me I no longer had any debts other than our home mortgage.  I was so surprised. It was surprising because the plans we put in place didn’t hurt or restrict us from living.  Here they are:

• One: Learn how to pay your bills.   We had to retrain ourselves on how to pay our bills.  It’s in how we handled bill pay that led us to much needed improvement in our money mismanagement.  We realized that on paper, there was no reason we should ever be behind on paying any utility or monthly recurring bill.  We had to create a method to pay these first. In the early days we split the bills up based on our paydays and paid those 1st.  This discipline or retraining led to our budget billing strategy.
• Two: Become a student of your spending.  In a recent mastermind group meeting, I asked the guys how often do they look at the reports it takes to manage their jobs and projects in their various offices.  Many created reports and most said they review and update weekly if not daily. So I asked the questions, what if you looked at your family’s, your business’s finances in the same way?  Would you not work to improve the numbers and find out what it takes to not make mistakes? I posed this thought. Maybe your finances are in the shape they are in because you don’t study them. Wouldn’t you enjoy reviewing your finances if you had the ideal financial disposition.  In other words, if your net-worth was positive you’d look at the reports everyday and look forward to it.

Today Is Friday!
I suggest you start with a simple plan.  Having a simple plan works far better than having a cumbersome, complex process to getting your debts tamed.  Start with something that requires very little time and no added expense. Improve the process of how you pay your bills and become a student of your finances.  Don’t put more time into another’s priorities than you put into your own. The better you make yourself, the better you can make another.

The Family Plan Binder is available now!

Our team has worked very hard putting it together. We designed it to help you and your family move the needle forward in making your life your business. Find out more about the Family plan here.