One of the most effective methods that we decided upon when figuring out how to get out of debt, was to channel our impulse spending. This has helped us to both get out of debt faster and to develop discipline with our finances.
How to Get Out of Debt by Evaluating Expenses
In talking with people about their finances, I’ve found that one of the problems that many people face when trying to figure out how to get out of debt is that they can’t find any additional ways to reduce expenses. Once they remove or cut back on their discretionary expenses as far as they can, they then have little else that they can do.
However, in most of these cases I still find plenty of impulse spending happening throughout the month! That means that there is extra money “somewhere” in the budget that they are not considering.
When you begin to think about making a purchase – no matter how large or small – you always have the option to change your mind. My wife and I go through this as well. I may get frustrated by my 6-year old bluetooth headset and desire to buy a new one. I’ll even begin researching models and looking up prices to get a great deal.
Then I remember our mountain of debt and decide to make due with my old headset for a little while longer. If you are trying to figure out how to get out of debt, then you probably go through this dance often. However, you must decide to take this one step further in order to accelerate your debt repayment efforts.
You must take that money that you would have spent on the desired item, and use it for debt repayment. Since you somehow found an extra $30 to go to the movies (or $50 for my headset ;-)), then channel that extra money toward the largest priority in your debt repayment plan.
By channeling all of your impulse buying you are now able to accelerate your debt repayment plans, and you now have another tool in your financial toolbox. If you are wondering how to get out of debt, then you need to begin channeling your impulse buying immediately. In fact, when we find extra money for unimportant things and decide to pay off debt with it instead, we immediately log into our bank account and send of an electronic payment to the credit card company!
There is another added benefit to this method…
How to Get Out of Debt by Developing Discipline
Remember that many people will set up a budget and claim that they have no room to develop a plan of how to get out of debt. However, if you make impulse purchases then that proves that you aren’t being as careful with your evaluation as you may think. Once you decide to channel your impulse buying dollars toward debt repayment, then you will likely be more disciplined and careful when it comes to allocating your income.
Also, this will cause you to become more disciplined in regards to your debt repayment plan. With us, we now find pleasure in finding any small amount of extra money to pay down our debt! If you are like us, you will try to find bargains on items and put the savings toward debt. When considering how to get out of debt, it pays to be disciplined in your approach and to look for multiple ways to attack your debt!
A Few Things To Consider
- When writing about impulse spending, my assumption is that you are not putting these purchases on your credit card. Since how to get out of debt is one of your main financial concerns, abstaining from credit card use should have been your first step.
- You need to have other strategies in place in order to tackle your debt. Applying an extra $100 here and $50 there, will not help you pay down $30,000 in debt fast enough. Here are some tips to pay off your debt!
- You may want to keep track of these extra payments and make a game of trying to find more places from which to squeeze from in order to meet your goal.
photo by Minimalist Photography