If you’ve been stuck in agonizing mental loops trying to figure out how to get out of debt, it’s time to put your anxiety to one side and start strategizing. By plotting out a step-by-step plan, you’ll be able to simultaneously improve your financial situation and calm your stressed-out mind.
The following five tactics will help you get started and improve your financial situation. The best part is, you can put them in motion today:
1. Ditch the guilt, blame, and victim mindset
Maybe your ex was a bit spend-happy with the credit cards, or a former business partner ripped you off. It could even be your own past self you’re furious at for getting you in this predicament. Whoever you’re blaming, stop. This only serves to fuel the racing mindset that keeps you up at 3 AM stressing instead of taking proactive steps to get your finances in order.
If you cast yourself as the victim of an external party or a past version of yourself, you strip yourself of the power to take responsibility and take action. This may take some time, but whenever the blame game loads in your mind, be sure to eject it before it takes over.
2. Build a brutally honest budget
You probably want to roll your eyes and skip this step because everyone says to make a budget. However, not everyone hammers home how brutally honest you need to be. Scour your bank accounts, credit card statements, and all your subscriptions and regular expenses.
By being accurate down to the cent, you can see where your biggest cash flow leaks are, which means you can see how to fix them. You’ll also have a platform from which to run projections. For example, you can test out how many weeks you can shave off your debt repayments if you cut out your streaming service and takeaway food for three months.
3. Carve out your path to financial freedom
From here, you can model a number of different approaches to getting out of your financial bind. This can involve cutting expenses, boosting your income, participating in no-interest loan schemes or a combination of all these. If you can set your anxiety aside, this part is actually quite fun. You’ve turned the source of your anxiety into a challenge, and you’re running plays until you find the one that will help you overcome it.
You may have to give up your time in order to earn more money and some luxuries in order to save. However, if you’ve made projections from your budget, you’ll know precisely how long you have to grind for. You’ll also be able to switch things up if you struggle with the initial plan.
4. Set smaller milestones
You will likely be enthused when you commence your journey to financial freedom. However, this motivation will soon abandon you if you don’t set mini-goals along the way. These milestones remind you of how much progress you’re making and allow you to reward yourself for sticking to the path. Just make sure your reward isn’t a shopping spree or a night out at an overpriced restaurant.
5. Educate yourself
Throughout this entire process, you should dedicate a small chunk of time each day to educating yourself about the world of finance. You can do this through reputable financial blogs, books, or even free online courses that cover economics and personal finance.
Stick to the steps above, and don’t skimp on the education part of the equation. The more you know, the better equipped you’ll be to improve your financial situation and keep growing your wealth for life.