Financial Freedom Goals for 2012: Start with Debt Reduction
Along with losing weight, getting out of debt is the most popular New Year’s resolutions. The most popular financial resolutions are saving more, paying off debt, and reducing spending. More than half of most resolutions are abandoned within a month and reducing debt is forgotten within weeks. If you resolve to get out of debt this coming year, here are some ideas for not losing sight of that goal.
Don’t focus on zero debt, focus on financial freedom. Debt is at worst slavery, at best willful indentured servitude. If your family takes home $5,000 per month from your job after taxes, but your credit cards, loans, and rent or mortgage total $4,000 each month, you work only one-fifth of your hours for yourself. The remaining four-fifths of your time at your job is exclusively for your creditors. You might as well just hand your paycheck over or work off your debt directly with the credit card companies.
If it motivates you, think about what you would do with your freedom from debt. Without having to pay credit card companies, you would have the freedom to choose where your take-home pay goes. Perhaps, towards a real estate investment or save up for a vacation.
Replace bad habits. Excessive shopping can be a habit. Many compulsive shoppers who go into debt do so because shopping helps them deal with difficult emotions like anger, frustration, and stress. The excitement of shopping helps to temporarily improve a person’s mood. But this habit can be replaced with a healthier alternative.
If starting a shopping trip helps you deal with difficult emotions, replace shopping with jogging, running, or another physical activity. While the act of spending money improves the mood of habitual shoppers, physical activity improves anyone’s mood.
The key to making a resolution stick is to keep it in front of you every day. If your loan or credit card allows you, and if you are not charged an extra fee, make small payments every day before you go to work.
Wishing you a very happy, prosperous and financially free 2012.