Time for a debt diet?

Over imbibing on rich food (say, like you might have, during a recent Thanksgiving feast) can certainly cause your jeans to feel a little snug (and no, it’s not the dryer’s fault).  The one benefit of this turn of events, is that it is extremely motivating to get back into shape.

The same principle can be applied to your finances.  Are you financially fit, or is it time to go on a debt diet and shed that unwanted debt load?

Gather the info

First step to tackling your debt? Find out exactly what you are dealing with. Gather all of your bills, receipts and statements. Once you know exactly how much you owe, you can move forward with a plan to eliminate and/or seriously reduce your debt.

Follow the dollars

Now that you know how much you owe, determine where your money is going every month.  The main goal here is to determine if your debt load has accumulated because of a habit of spending beyond your means consistently, or if you’re not efficiently spending the money that you’ve got. Track your spending for at least a month so that you can identify areas for improvement.

Set a budget

Just like you would set out a meal plan if you were trying to shed a few pounds, so should you set up a budget that will help you attack your debts aggressively. The key to removing and/or reducing your debts is to find some extra cash to plonk down on those credit cards.

It may be a question of redistributing your spending, or you may want to consider a debt consolidation to free up your cash flow.

Scale back

In just the same way that you didn’t need that extra piece of pumpkin pie, you don’t need 99 percent of those impulse purchases that may be behind your credit card balance.

Cast off that “buy-now, pay later” attitude in favour of saving now and reaping the rewards of a trimmed down debt load later.