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I wanted to write a quick post about I problem that I hear from a lot of people who are in debt - not doing anything until the perfect plan is in place. This is a huge mistake. Stop reading blogs and personal finance books, and start taking action.
Getting out of debt is not hard - it just requires discipline. In the simplest terms, the only plan you need is to,
- Pay more money to your creditors
- Spend less money so you can pay more to your creditors
- Earn more money so you can pay more to your creditors
That is it. It is not complicated.
Budgets and Track Expenses Suck!!
In my recent article, How To Get Out of Credit Card Debt, I wrote about how it is not necessary to track your spending for 30 days or to create a budget. About 99% of all personal finance books start by requiring readers to do these two things. AARRGH!!
I can think of nothing that drains the energy from people faster than putting the debt repayment on hold while they track expenses and create a budget. If this type of activity works for you, then great - DO IT. Do it now and start paying off your debt.
But, if the need to create a budget and track expenses is keeping you from getting started in paying off your debt, then don't do them. Many people have gotten out of debt without creating a budget and tracking expenses. These are just tools. Very helpful tools, but at the end of the day - just tools.
Remember the goal here is to pay off debt, not to have the perfect plan to pay off debt.
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Great point! I must admit my personality lends itself to the “ready, ready, ready” mentality (rather than “ready, aim, fire”) so I have to work hard at this in all areas. Even if you start with a great plan the odds are you’ll change it, tweak it, and adjust it as you gain experience. You’re right on, the important part is to get MOVING!
Deacon Bradley´s last blog ..What Web Startups Teach Us About Winning with Money
Without taking action (paying out money) people cannot get out of debt. We are completely on the same page for this discussion Debt Hawk. Last time I checked the credit card companies do not take budgets or a shoe box full of receipts as payment. Only MONEY. Yes a person still needs a plan, but a plan without action is just a piece of paper.
Jeff´s last blog ..Dear DAD (DeliverAwayDebt)
@ Deacon Bradley – Thank you so much for leaving a comment. You are absolutely right that ACTION is needed. The faster you pay back your debts the more likely that you will reach your goal.
@Jeff – “credit card companies don’t take budgets” – I love that line!! I am definitely going to use it
I think the most important thing for anybody in debt to do is to tackle the highest interest accounts first and work your way down. First and foremost however is to start somewhere and learn tips on how to live a reasonably frugal lifestyle.
Nice post.
The Rat´s last blog ..Do You & Your Spouse Argue Over Finances?
Tracking expenses has become easier than ever today. I use mint.com. It tracks for me. Once a week I go in and make sure things tag correctly. Then if and when I have questions on my spending I log into the website and there it all is broken down by category. It’s not perfect but it’s not meant to be. It gives me a general idea of where my money goes. I hate tracking so this is as good as it gets for me.
Evolution Of Wealth´s last blog ..Mortgage Acceleration Experiment – Full Picture
Tracking expenses DOES make an enormous difference, but you don’t have to do it before you get started, that’s for sure! And if that’s the thing that’s stopping you, just skip it until you’re ready for it.
Jackie´s last blog ..Admit That You Can’t Do Everything