Debt consolidation, while it is an effective debt relief option will have to be partnered with the right attitude to be effective. It usually just involves practicing the right financial management skills and making wise spending decisions.
One of the habits that you need to change is your fear of debt. There is nothing that you can do about it but to face the problem that you created. There is no use running away from you debt because ignoring it will only cause it to grow. The longer you fail to settle your debts, the bigger interest you have to pay for it. Not to mention the late penalty charges that will be put on top of it. This is especially true for credit card debts. Find out how much you owe and make the decision to commit to your debt consolidation program.
The next habit that you have to change is to stop acquiring more debt. If you have to change your lifestyle to do that, then go for it. Keep your credit cards so you will not be tempted to use it again. While it is very convenient, it is notorious for helping you rack up a huge amount of debt. Unless you are sure that you can control yourself, store your cards in a place where it is difficult to access.
And if you got used to buying things on an impulse, you have to change that and plan every little expense that you will make. Set up a budget so you can maximize your debt payments. A budget plan will help you monitor where your limited income goes to. Categorize your expenses and set a limit for each. Make sure you keep your budget realistic so it will not be difficult to follow. You will realize how much stress will be relieved from your mind once you have set up a system that will allow you to have an overview of your finances. Sometimes, all it takes is the feeling of being in control of the problem. That gives you the insight as to how you can best pay off everything that you owe. And even when you have finished paying off your debts, this is one habit that you need to continue practicing.
Your budget will help you change another habit that debt instilled in you – spending more than what you can really afford. You need to start living within your means so you can stay out of debt. This coincides with the lifestyle change that you will be forced to do. While it may be scary at first, you will find that there are cheaper substitutes to what you used to enjoy.
Lastly, make a list of your wants and needs. The habit that you need to change here is making excuses to promote your want as a need. This will not help you. Stop thinking that your wants are really necessary for you to survive. You do not “need” a bigger TV and you do not “need” that spa treatment for your personal growth. Just say no to these wants and make better choices to keep your spending within your budget.
The debt consolidation program that you will use to pay off your debts will solve only one part of the problem. The other half will be solved by these habits that you will develop. They will all help you stay out of debt long after you have completed your debt payments.