Debt is controlling my life like many Americans and other individuals around the world. Instead of being a tool to help be live better, it has become burden that weighs me down and slows my progress in life. This bad debt creates anxiety, worry, and fear. It’s time to free myself. It is a basic process that takes time, patience, and some effort. After doing some research and studying the matter, I’ve found that it’s much like curing a disease. Here are the four steps I will be taking to eliminate bad debt.
- Triage and Assessment. I need to know where I am financially. It gives a clear picture of what needs to be done. During this step, I list all the debts that I have and the interest rates associated with each loan and line of credit.
- Diagnosis. Often times debt is an underlying symptom of something else. How did I get to this place in my life? What’s the Underlying reason for my symptoms? The obvious reason I am in debt is due to me spending more than I earn. However, why did I, taught to be a saver and investor, turn into an consumer?
- Treatment. The process of eliminating debt will take time, patience, and energy. With enough effort and working intelligently, I can speed the process. I can formulate an effective plan and take action. I will redevelop my good financial habits and learn new ones in the process. Lowering expenses, increasing income, proper planing, making payments on time are among the things I will be doing in the treatment stage.
- Prevention. The best way to get out of debt is to stay out of debt. Not all debt is bad. It’s how debt is used that dictates what it turns into. The American dream is a good dream but it turned into a nightmare because people chased the materialism instead of the quality of American life.
Carrying bad debt cuts me off from opportunities now and in the future. The interest I owe generated by my debt could have been used to improve my life. I want to reopen this door of opportunity and will focus on this goal for the entire year. I must make the short term sacrifices to realize long term financial success.
Tags: Debt Reduction