Stop Accumulating Debt

So many financial advisors spend a tremendous amount of time teaching the virtues of eliminating debt. All too often the actual process and addiction of accumulating debt goes unaddressed.  Before you can focus on getting rid of your existing debt, a plan needs to be place to stop spending money that you don’t have and accumulating additional debt. If detrimental spending habits aren’t changed, you’re more apt to just repeat the cycle once one round of debt is paid off. Follow this advice from the other experts and not only will you be able to eliminate your existing debt, but you can feel confident about not acquiring additional debt beyond your means.

In an ideal world, we’d have not debt.  As you well know, for most people that part of the ideal world doesn’t quite exist. There are formulas and strategies that lay out the maximum amount of debt you should accumulate. These formulas apply to both mortgage loans as well as consumer debt. Consumer debt payments, together with mortgage payments, should not exceed 36% of your gross (before taxes) pay.  That’s a guideline, not a hard and fast rule. Make a list of your existing obligations. Subtract that from your take home, net, pay. The remainder is the maximum amount available each month for discretionary spending. Period.  If you see a pair of Steve Madden shoes that you absolutely must have, stash your cash for the necessary number of pay cycles, grab your Groupon coupon and go for it. Those Steve Madden shoes will be twice as comfortable knowing you paid cash for them! No more charging, not more installment loans. It’s called living within your means. Splurging on an awesome pair of shoes is perfectly acceptable once you have the cash to pay for them in advance.

Follow these guidelines and you’ll not only manage to get debt free, but you’ll also remain debt free!