Look for creative ways to bring in more money. Saving your way out of debt may seem slow at first, but eliminating debt forever will pay for itself a thousand times during the course of your lifetime.
Step 4 Use Periodic Savings Guilt-Free! Most of us feel that savings are not to be touched. Periodic savings are meant to be used, guilt-free, to pay for periodic expenses rather than charging them.
Step 5 Reduce Debt with
a Proven Strategy Once debt is
stabilized and you’re building your periodic savings, you’re ready to start reducing debt. Designate whatever amount above the minimum that you can pay toward just the targeted debt. When that’s paid off, roll over the payment amount to the next debt target, until you’re eventually debt-free.
The higher your debt, the slower the process of debt reduction will be. But please, reassure yourself: going slowly in the right direction is enormously better than going in the wrong direction at any speed.
Step 6 Build Your Safety Net
It’s important to have a plan for the possibility of an interruption of income. A Safety-Net Savings account is designed to cover your living expenses if your income is interrupted for any reason. Your Safety-Net account is to be used only if you have an interruption in income. Once you’re no longer paying off debt, you can roll that money right into savings without changing your monthly spending plan one bit.
Acrobats on the high trapeze always have a safety net below. This offers the acrobats not only protection but the confidence to really fly. Safety- Net Savings protects us, but it also offers us the freedom to create new career possibilities rather than feeling trapped in jobs that make us unhappy. That’s why I think of this account as a “freedom fund.”
Step 7 Celebrate Being Debt-Free!
Living debt-free may seem like a fantasy, but I have celebrated this reality hundreds of times with people who have used the saving your way out of debt plan. Clients have literally danced in my office after they made their last debt payment. I’ve danced with them! Be sure to celebrate your accomplishments. You deserve it.
Step 8 Plan for the Future with Long-
term and Investment Savings Periodic and Safety-Net Savings not only keep us out of debt but protect our investment and retirement accounts. With Periodic and Safety- Net Savings in place, your long-term savings are truly secure.
aspiremag.net
Step 9 Resist the Seduction of a Zero
Balance Once you’ve eliminated debt, those big zeros on your credit cards can call to you. Instead of succumbing, use your periodic savings to pay for non-monthly expenses. Learn to delay optional purchases until your savings grow enough to make them. Enjoying a special purchase that is made without incurring debt doubles the pleasure.
Step 10 Enjoy Real Financial Freedom
By leveraging the power of savings, you can free yourself from debt once and for all. Debt-free and secure, you can experience financial serenity. Imagine a life without being confined by the cage of debt and the stone walls of worry. Saving your way out of debt is a powerful tool in securing a healthy relationship with money at whatever your income level.
Karen McCall is the founder of the Financial Recovery Institute, an international organization for financial counseling training. Her latest book is Financial Recovery: Developing a Healthy Relationship with Money. More information at www.
financialrecovery.com
Based on the book Financial Recovery. Copyright © 2011 by Karen McCall. Reprinted with permission of New World Library, Novato, CA.
www.newworldlibrary. com or 800/972-6657 ext. 52.
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