The next time you stop and read story about how someone climbed out of debt that seemed as though it would be insurmountable, make sure you take not of how they did it.
Getting out of debt that is in the $50,000 to $60,000 range (and this debt would be considered unsecured) isn’t easy, and certainly can seem more than just a little daunting.
So how exactly do these individuals do it.
The most common and prevalent answers are two specific ones: budgeting and expense control. The budget one is pretty easy to understand once you rack up that much debt and then realize that you’re living well beyond what you can actually afford. The budgeting part doesn’t always have to be about finger pointing and spending too much as some can trace it back to not having a budget at all, or at least one that is very much incomplete, missing incidental expenses or one time buys that you just as soon ignore.
Expense control is part of budgeting but if dial into that one a little more specifically, you’ll see that living a low cost lifestyle is what most who are swimming in debt tend to do in order to turn things around quickly. The issue with this way of thinking is that most individuals don’t want to give up the lifestyle they have, whether that’s the house they live in, car they drive or how many times they can go on vacation in a year’s time.
The low cost lifestyle is one that smart money managers absolutely adore, and they wouldn’t be opposed to the most extreme changes to their life in order to say so long to debt for good. They’ll trade in that $2,000 per month mortgage for an apartment for a third of that price. They’ll keep a car that is paid off versus trying to finance a new one and introduce yet another payment into their lives.
In addition, they’re not afraid to cut things out of their lives that some would consider needs but they’ll classify as wants. That includes eating out restaurants for convenience, cutting out cable and sticking with their DVD collection or streaming services or taking a look at their cell phone bills and thinking about taking on a lesser monthly amount.
Low cost often is associated with not having what you want, but that is perception versus the reality of being able to save you have a savings account and a better financial outlook when it comes to money and how you’re managing it.
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