It’s hard to believe it, but this year will soon come to a close. This is a perfect time to look over the past year and begin to think about the next. When I was in the middle of paying off debt, every year around this time I would start wondering if the next year would be the one in which I’d finally taste debt freedom.
If you are carrying anything around the average credit card debt of $16,000 you likely feel the same way. Take heart, it can be done. You can kill your debt next year, or make significant strides towards it in a few simple ways.
Make A Plan
If you want to kill your debt next year, you need a plan. Simple, yes, but also very powerful. Just as you would plan out a vacation, you want to plan out your debt payoff. The key is to personalize it. Will you use the debt snowball or debt avalanche method? Will you start a budget or simply track your expenses?
These are questions you want to ask yourself. The answers will help you formulate a plan. This plan can, and likely will, change over time. That’s ok. The point is to start one. As the saying goes, you can’t know what you don’t track. Think of this plan as what will direct you as you pay off debt.
Make More Money
So often, we focus on cutting costs when we’re paying off debt. That makes sense as we need to find ways to free up money to throw at debt. However, the focus should not solely be on this. You also need to find ways to make extra money.
Don’t just use this money to buy more things. Rather, use it to speed up your debt repayment. I did this when I was paying off debt and it helped immensely. I know what you’re thinking. You’re thinking you don’t have time to get a part-time job. That’s fine, but that’s only one way to make extra money. There are many other ways, such as:
- Ask for a raise
- Start a side hustle
- Pick up extra hours at work
There are many other ways to make extra money. Think outside the box and let the idea of becoming debt free motivate you to take action.
This is one of the most overlooked ways to pay off debt. Paying off debt can be very isolating. You might feel shame and disappointment or lack motivation. Those are all understandable feelings. Those feelings, however, can take us off track.
Counteract that by surrounding yourself with others. Be purposeful about these friends. These friends are meant to not only hold you accountable to kill the debt but also to motivate you. Trust me, both are needed to be successful.
Adjust the Attitude
The key to staying out of debt is adjusting our attitude. You don’t want to pay it off only to return to it in the future. You want to break the cycle of debt. This attitude adjustment will look different for everyone. For me, it meant getting rid of the “I deserve it” attitude.
I thought I “deserved” to buy myself something if I had a bad day or was simply unhappy. That can be a costly attitude. Yours may be different. You need to be self-aware to know what that attitude is and get rid of it. It will be difficult to do at first, but take one day at a time and over time you’ll see a changed attitude.
As you begin to look at the upcoming year, realize it starts now. Commit to killing your debt now and you will be well on the road to tasting debt freedom next year.