Well, it's almost that time. Almost time for that annual re-thinking of our priorities and coming up with a resolution to change something for the better in our lives. New Year's resolutions have become a staple of our holiday traditions here in America, where annually almost everyone at least considers making some significant change in their lives.
For us, here at the Debt Relief Blog, our personal journey to self awareness and re-prioritization (everybody else is making up words, so why can't we!) must necessarily revolve around our financial outlook for the coming year. What do we need to change to get ourselves into better financial health? What resolution can we make to get us started toward a debt free future? These are the questions those of us in debt must consider.
So what do we do?
For me, my personal financial plan is to eliminate a substantial amount of my remaining debt in the coming year. I have some debt at really low interest which doesn't bother me (4% and 8%), and I think I should be able to get rid of the rest of my debt by year's end. I plan to pay off the remainder of my high interest credit cards by summer and then pay off the 8% card before it switches back to a higher rate in August. That will leave me with just the 4% card, which I actually will not pay off as long as I can get away with it (the 4% was a special offer, but is permanent as long as I pay on time!).
This plan will require some discipline on my part, no buying expensive toys, no extravagant vacations and so forth, but is completely workable given my financial history. In fact I haven't taken a vacation (one with travel involved anyway) in several years and my wish list of possible purchases keeps getting longer, the longer I stay away from these personal indulgences (I love photography and would love a digital SLR, I also want a classical guitar, if anyone is interested).
Hopefully, by 2012 I will be in a financial position to consider allowing myself some of these perks that I have missed out on for a few years now. And then, if things go as planned, year after year I will be able to enjoy at least a few of these luxuries (not luxuries to some, but if you're in debt...) until I reach retirement.
So what does this mean for you, the reader in debt yourself? Well, to start, I would advise some similar frugality on your part until your finances are a little healthier. Were you (or I) to go out and spend money unnecessarily, just as we were putting a dent in our debts, we would soon find ourselves back in the same financial whole we had almost escaped from.
But what if you can't afford to come up with the cash flow to actually pay down your debts, no matter how frugally you live. Well, then it's time to get some help. Get an attorney that specializes in debt reduction, and have them negotiate a reduced settlement on your debt accounts. They can do this quite effectively, and even after paying the attorney (who usually takes some portion of the eliminated debt) you will be in far better financial shape. The attorney will have negotiated a settlement of a reduced debt with small payments which you can afford over the next year or two.
This puts you in the same situation as myself, with a frugal outlook for a year or two, at which time your debt will be totally eradicated. It's true, this really works. And by the time you have paid off the settlement your credit rating will be considerably healthier than it is today. Even with the settlements, your rating will be better because you will be debt free and have a (recent) history of paying on time. Recent history is the most important factor.
So, with a little discipline, no matter your current financial situation, you can have a whole new financial re-birth in only a couple of years. There's no excuse not to resolve to move aggressively on your debt this New Year. So 2012 and 2013 can be the start of a whole new you.