Getting Out Of Debt

If you find yourself mired in credit card debt, it is definitely possible to escape. However, it requires a certain level of commitment and dedication. It’s been said that getting out of debt with credit cards is a lot like losing weight. It’s a long and arduous process that seemingly goes nowhere. It requires discipline and will power to be able to sustain.

Your first course of action is to set a goal for getting out of debt. No one really teaches people how to set goals. This is a shame because goal setting, when done properly, is a skill that can bring tremendous success, not just in debt management, but for life in general.

People are afraid to set goals. People are even more afraid to write them down. They think to themselves, “What if I don’t hit my goal? Then I’ll have failed” If you set goals up the right way, you will not fail.

Goals must be SMART. They must be Specific, Measurable, Attainable, Realistic, and Time-bound.

Specific goals can help you succeed more than general goals. General goals lack focus. A specific goal is easier to follow and measure. For example, “Get out of debt” is too general. What kind of debt? How much debt? When will you know you’re out of debt? A better way to state this goal is “Eliminate $12,000 worth of debt within 24 months.” Specific goals should answer who, what, where, when, how, and why.

Goals must be measurable because measurement is how you gauge progress. By gauging progress, you can see where you’re going right, going wrong, and how to correct it. For example, setting a goal of “Get out of debt” is not a SMART goal. There’s no way to measure your progress. However, if you determine ahead of time that you’re $12,000 in debt, then you can set your goal as “Eliminate $12,000 of debt.” If you know you’re still $12,000 five months after you set your goal, you know that your debt elimination strategy isn’t working very well.

Attainable means that your goal is actually within your reach. The human subconscious is an interesting thing. Once you program it for an attainable goal, it will direct you towards the right direction in order to achieve the goal. You begin to notice things that you’ve overlooked in order to reach goals. For example, if your goal is for getting out of debt, you might not have noticed that $15 per month video rental charge. You then realize that you don’t really watch $15 worth of movies per month, so you can cancel the membership. Little things like this add up.

Reasonable means that your goal is not exorbitant. If you are $12,000 in debt and your goal is to eliminate $12,000 of debt by next week, you are0′t setting a very reasonable goal. Short of winning the lottery, you set yourself up for failure. The goal is something that you are willing and able to achieve. Another measure to see if your goal is reasonable is to think back to a similar goal you’ve accomplished in the past. If you’ve done it before, you can do it again.

Time-bound means that your goal must have a time limit. Simply stating that you’re going to eliminate $12,000 worth of debt without a time limit means that you can take 30 years to pay off your debt. Attainable for sure. But is it reasonable? Is it going to help you with your current financial crisis? A better goal would be “Eliminate $12,000 of debt within 2 years.” What makes this a good goal? You can try to pay off about $500 worth of debt every month, an amount that is within reach for many people. It will take you roughly 2 years to be completely debt-free at this pace. Let’s say it’s been one year since you set this goal. You have paid $5,000 off your debt. You have $7,000 to go within 12 months. Obviously, you can make an adjustment to pay a little extra to get your debt eliminated. If you had not set a measurable and time-bound goal, you could not make this correction. It’s like driving without a map.