If you’re following our steps to getting out of debt, you’ll find that we believe that you have to change your habits before anything else in your debt kicking journey.
Getting out of debt starts with changing the way you think about debt and how you approach your finances in general.
If you want to get out of debt and stay out for good, these are some financial habits you must change.
Live Within Your Means
If you make $4,000 a month and have a $2,000 house payment, you’re house poor. There is no way you’ll be able to pay off any debt when a majority of it is going towards that house.
If you’re making $30,000 and buying $2,000 purses, you’re living above your means.
Stop Rationalizing Your Purchases
I was very guilty of this. I LOVE my electronics. Whenever I wanted something new – like a new camera for example – I would rationalize why I “needed” it in my head.
I would say things like “if I get this new camera, I’ll actually start taking pictures more since it’s a better camera than the one I already have”. Guess what… I got that camera and pretty much never used it.
Chances are when you’re saying you “need this to do that”, you really don’t. You can deal with what you have now.
Don’t Assume Something Will Happen When It Hasn’t Happened Yet
If you’ve ever seen National Lampoon’s Christmas Vacation, you’ll remember how Clark was expecting a huge Christmas bonus. Because he was expecting his bonus, he put down a huge non-refundable deposit for a new pool.
Guess what… that bonus never came (without kidnapping his boss first… not recommended LOL).
The moral of that story is don’t plan on money coming if you haven’t already gotten it yet. That’s why we like to budget each time we get paid. If the money isn’t in our account, it doesn’t get distributed into our budget categories.
Budget & Track Your Expenses
Speaking of budgeting, if you aren’t doing that yet, it’s a habit that you MUST change to be successful at getting out of debt.
Make sure you’re also tracking your expenses as the month goes on so you know when you’ve spent all of the money in your budget categories. You have to stay on top of it or you will overspend.
Stop Being An Impulsive Spender
I think most people are probably guilty of this one, but you have to stop being an impulse spender.
For example, Porscha knew that every time she walks into a Target, she leaves with a lot of things she bought just because she wanted it. What did she do? She stopped shopping there while we were getting out of debt. If we did go there, we went there together so we could keep each other accountable.
If you’re actually following your budget, it should be easier to curb the impulse spending habit.
Stop Trying To Keep Up With Other People
Just because your friend got a new pair of shoes doesn’t mean that you need some too.
