Is Your Stubbornness Keeping You In Debt

Many people say that they don’t have any extra money to pay down debt and improve their financial situation because they are used to living a certain lifestyle and want to maintain that lifestyle. However, when they record all of their expenses or consult a financial advisor, financial coach or personal finance expert the picture changes.

Many people are in shock about how much money they actually spend and what they spend money on. The first step to overcoming a problem is admitting that you have a problem. The second step is developing a plan to overcome the problem. This is the step where many people have difficulty when it comes to finances because many people are stubborn and don’t want to make any changes.

Many people know they are in debt but don’t want to change their mindset or their lifestyle to do what it takes to improve their situation. Americans as so accustomed to instant gratification and buying on impulse it’s difficult to change that behavior especially when you were not taught about financial literacy in school or by your parents.

You can’t continue doing the same thing day after day expecting a different result. The only way to survive this recession is to make a change. It is a horrible feeling to be in debt, live paycheck to paycheck or be unemployed. I have experienced all of those and I vowed to myself not to be in those situations again or if I was, develop a plan to ease the burden during those difficult financial times.

Here are 5 tips to prevent your stubbornness from keeping you in debt:

Admit. Admit you have a financial crisis. Discuss with your spouse, partner and children about your situation, be honest. Once you admit you have a problem it is much easier to get or solve the problem.

Budget. Create a budget by recording all of your expenses and monthly income. List everything you spend money on during a month including variable expenses such as yearly or quarterly bills. Include monthly debt payments and loans in your budget. If you have 5% of your total income or less left each month you definitely need to adjust your spending.

Reduce. Reduce your expenses to free up extra money. Shop at discount or wholesale stores, get the cheapest cable, cell phone, satellite radio or internet services available or cancel them. Buy groceries in bulk. Shop for clothes at Target, Walmart, thrift stores or discount stores. Turn off lights and electronic devices if you are away from the room more than 20 minutes at a time.

Turn the tv off. If you or your family spends a lot of time watching tv, reduce the hours spent watching tv which will reduce your electricity bill. Go for a walk, play games with your family, read a book or find a new hobby.

Change your mindset. Many people have negative thoughts about money and this causes them to continue to be in debt and prevents them from being able to improve their financial situation. Eliminate the negative thoughts such as: “I will always be broke, I will always be in debt, I will die broke”, etc. These thoughts prevent you from being able to develop a plan to improve your financial situation.

Make one small change at a time and over a period of time your situation will improve. You will have less stress, less fights at home and you will be a role model to someone else by being able to give them advice on how to overcome a difficult financial situation.