Advertising
Advertising

14 Important Steps You Should Take To Free Yourself From Debt

14 Important Steps You Should Take To Free Yourself From Debt

Whether your current debt is large or small, the challenge of getting out from under bills and “I owe yous” can feel insurmountable.

Free yourself from the quicksand by doing the following.

1. Acknowledge that Houston, we do have a problem.

If you are in debt, you have a problem. The degree to which the problem is manageable depends on whether you are in planned, deliberate debt, such as student loans or the purchase of a specific type of vehicle for work; or in chaotic debt, such as the kind that results from taking too many pretty dates out for expensive drinks you can’t afford. You must accept that debt is a problem before you can fix it. So throw your hand in the air, state your name, affirm that you have a challenge before you, and commit to meeting that challenge and free yourself from debt.

Advertising

2. Take stock of the situation.

Why are you in debt? What are you spending money on? How much money are you making? Has your debt increased, or are you having trouble climbing out from under hefty interest payments? Are your expenses driving you further into debt, or is it the costs associated with caring for a family member? Don’t worry about finding solutions just yet—first, identify the problem areas.

3. Step back from your emotions.

Spending habits are deeply personal, because they reflect our priorities. There are often added layers of shame, guilt, and regret when discussing debt.  Recognize that none of those emotions will help you solve your current debt problem, and step away from them.  Focus on the fact that you are taking control, you are asserting yourself, and you are disciplined and focused enough to make this happen, all of which are positive emotions.

4. Break out your pen.

Dedicate a notebook or binder to your “get out of debt” plan. Write down anything you identified as a problem area. Be sure to list all debts, who or what you owe money to, and your current payment schedule.

Advertising

5. Stop flailing.

While you are evaluating your spending habits and developing a course of action to correct your debt, stop spending. It is much easier to evaluate how and why the boat is leaking without more water pouring in. When you make purchases again, you will be able to do so with deliberate intention.

6. Record all expenditures.

Create a section in your notebook, or an online spreadsheet, to evaluate all expenditures over the course of the last six months. Print credit card statements, online bank records, and dig those receipts out of your purse, car, and gym bag. You must gain an accurate picture of where your money is going, and if debt is a problem, you likely don’t have this picture as in focus as you would like.

7. Identify patterns.

Can you identify patterns in your spending? Do you, for instance, always break the bank when you visit certain stores, or the day you get your paycheck? Do you spend a great deal of money on certain activities?

Advertising

8. Categorize spending, and prioritize.

Food, water, basic shelter, simple transportation, and functional clothing are needs.  Everything else is a “want.”  Break your spending into categories, starting with “needs” and “wants.”  Cut out all unnecessary items, and realize this might mean your cable subscription, smart phone, high speed internet, and a slew of other high-tag luxuries modern man is accustomed to having at his fingertips.

9. Be willing to make big changes.

Is rent eating you alive, or are you spending high dollars in gas each month to commute? You may have to move, locally or to another state, to lower your cost of living. You may have to drastically downsize. You may have to put that hobby on hold for a while. Commit to doing whatever it takes to get out of debt.

10. Seek expert help.

You are not the only person to stagger under debt, nor will you be the last. Talk to a financial planner at your bank, or attend a debt management class. There are numerous resources available.

Advertising

11. Do your own research.

Anytime the subject is money, be sure to actively engage your brain, scrutinizing all information you receive to confirm or reject its application to your financial situation. Get a library card, and spend some quality time there getting smart on financial management basics, as well as any unique considerations you may have. Bonus: libraries often offer basic financial management classes

12. Get creative in boosting income.

An extra dollar earned is an extra dollar to pay off that debt.  No opportunity is too menial, too demanding, or too low-paying for your time; if you’re in debt, you literally cannot afford to pass up income opportunities. Take a formal second job, or babysit, walk dogs, shovel manure at a community barn, scrub dishes, freelance online—aggressively seek opportunities for additional income and seize them.

13. Pay the maximum monthly amount possible.

Does your lender have penalties for paying off your debt early? Pay the maximum monthly amount possible without penalty, on time, every month.

14. Stay the course.

It took you a while to accumulate debt, and it is going to take you a while to get out from under it. Remain patient, keep chipping away at it, and soon you will be debt free and relaxed.

Featured photo credit: LendingMemo.com via flickr.com

More by this author

20 Art Therapy Activities You Can Try At Home To Destress 11 Things Highly Charismatic People Do Differently 20 Things to Tell Yourself When You Are Facing Adversities 30 Life Lessons From Chinese Billionaire Jack Ma These 8 Tips Will Help You a Lot When Meeting Your Partner’s Parents for the First Time

Trending in Money

1 How to Answer the Tough Question: What are Your Salary Requirements? 2 How Personal Finance Software Helps You Get More Out of Your Money 3 The Definitive Guide to Get Out of Debt Fast (And Forever) 4 35 Real Ways to Actually Make Money Online 5 30 Fun Things To Do With Your Friends Without Spending Much

Read Next

Advertising
Advertising

Published on November 8, 2018

How to Answer the Tough Question: What are Your Salary Requirements?

How to Answer the Tough Question: What are Your Salary Requirements?

After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

Unfortunately, this is the wrong approach.

Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

Of course, you can’t command a high price without bringing value.

The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

1. Hack time to accomplish more than most

Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

Advertising

Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

2. Set your own boundaries

Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

Here are some important traits to consider:

  • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
  • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
  • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

Advertising

3. Continuously invest in yourself

Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

4. Document the value you bring

Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

Advertising

Here are some ideas:

  • joesmith.com
  • joeasmith.com
  • joesmithprojects.com

Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

5. Hide your salary requirements

Avoid giving you salary requirements early in the interview process.

But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

6. Do just enough research

Research average salary compensation in your industry, then wing it.

Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

Advertising

Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

7. Get compensated by your value

Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

The bottom line

You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

Featured photo credit: LinkedIn Sales Navigator via unsplash.com

Reference

Read Next