Developing financial discipline is a great way to keep yourself out of debt. It is also a great way to help you recover from a long-term debt problem. According to a recent study in Forbes, 49% of Americans are living paycheck to paycheck. Which means that there is a massive debt problem silently playing itself out.
According to Ladder Advisors, the total American Consumer Debt stands at $13.86 Trillion Dollars! This debt includes mortgages, credit card debts, student loans, car loans, etc.
In this article, Ladder Advisors, one of the country’s leading financial advisory firms, helps us build productive financial habits. However, before we get the suggestions, let us look at some of the major disadvantages of debt.
Problems and Debt: An Interdependent Correlation
Debt is something, which does not only affect you personally, but also affects your family. Many psychologists frequently point out that debt and mismanagement of personal finance is one of the major reasons of divorce and breakups between couples.
Being financially responsible is a healthy sign of maturity in adults. It also shows discipline, and organized attitude to life and an ability to address unforeseen problems. While in some cases, getting into debt, might be beyond your control (health and medical emergency), getting out of debt, is very much a personal choice.
If you are looking to rebuild your life, you should develop certain financial habits, according to Ladder Advisors. This is not only going to have a positive impact on your personal life, but also affect the life of your near and dear ones in a better way.
5 Good Financial Habits to overcome debt by Ladder Advisors-
- Be ‘Positive’ in your mind-set when it comes to tackling Debt-
The fight against debt is as much psychological as it is about organizing your finances. If you keep a positive attitude when it comes to debt, you will not let it affect you in negative ways. This is one simple trick, which most people miss when it comes to addressing debt problems.
- Start Budgeting and Saving every month-
These two financial habits are going to be your greatest allies in your fight against debt. You need to start savings as soon as possible. The amount doesn’t matter. It is all about building financial discipline. Budgeting is like a roadmap into your immediate personal finance future.
- Pay heed to the advice of Financial Experts-
Good and credible financial advisory firms help people overcome their debt problems. They show you various ways to manage your money and offer easy options when it comes to debt repayment plans. Listen to what they suggest for your peculiar debt problem.
- Prioritize expenditures and cut down on unnecessary ones-
When you start budgeting, it is best if you prioritize your expenditures. For example, rent, bills, savings, loan payments, etc. should be your first priority. This will not only help you save on late payment fees, but also build better financial discipline and habits.
- Avoid lending money to friends and family members-
Sometimes, it is best to say a ‘NO’. This is not only helpful for you, but also forces the person who is asking for the cash to introspect. You might be helping him or her in ways, you probably wouldn’t have ever imagined. Do not encourage borrowings. They have the worst return rate.
If you are able to get into the groove of healthy financial habits, you will overcome your debt problems in no time. The important thing to remember is that debt is something that can be done away with. All it needs is time, patience, and a lot of effort.
Can you think of some other financial habits that can be productive in fighting debt? Let us know in the comments section below.