Dee and I were on air again Friday am, but alas, the segment didn’t make it onto the podcast.
To recap, this crash course covered off the following, applicable to anyone in debt:
- Put debt into appropriate perspective. Get to know your net worth, and debt’s place within that. This prevents debt from taking on boogeyman status.
- Find out what you are actually doing with your money. Pennyminder, excel, quicken – whatever tool works best. One month of record keeping is a bare minimum; three months will start giving reasonably stable data. This accomplishes a number of things. There are almost always some surprises. Good to know. It gives a strong sense of control. It helps us to be mindful of our spending. And ultimately, of course, it gives us data we need to make informed decisions.
- Get the details (that’s where the devil is!) on your debt. Very often this info yields immediate results – calling the bank and getting the low interest rate card instead; moving high interest debt into a low interest LOC; discovering penalties for late payments: All of these can result in positive impacts to your monthly cash flow.
- Start thinking through the importance of paying down debt in light of other decisions. It’s all about choice. Do you want to give up a job you like, to get higher income to pay it off faster? Would you want to take a low-cost vacation one year to pay down the debt instead? How does it compare to sending your child to private school? Etc.
- Maitenance. Rick asked a good question on air. “It’s one thing to have gotten started on this, but will Dee manage this over the long haul?” Here is the most important success-factor about tackling debt. The lifestyle changes must.be.sustainable for the long haul. This is about lifetime habit change, folks, not about the instant stress-relief gained by throwing every dime at the debt for three months. Dee has a lot going for her. She has a health and wellness background, and is very acquainted with the idea of making incremental change that pays off over the long term.
If you are in debt, and would like to meet for a 45 min comp session in my gastown office, shoot me an e-mail at nancy at your money by design (all one word) dot com.
Photo Credit: Davelkyn