Controlling debt is vitally important, not only to our financial well being but to all aspects of our lives. For instance, it is problems with, and disagreements over, money which are responsible for the majority of divorces in this country. In addition, money problems are a significant source of stress, and this stress can lead to serious physical illnesses. It is easy to see, therefore, how financial matters can impact many non-financial issues as well.
If large amounts of debt are a frequent cause of sleepless nights, then being debt free is a great way to achieve a restful, and financially secure, life. The keys to this financial nirvana are a good solid budget plan, a healthy dose of fiscal discipline and some good old fashioned common sense.
Perhaps the most important thing in controlling debt and spending is to establish a realistic monthly budget. It is amazing how many consumers, even those earning very high salaries, have never taken the time to establish a monthly budget for their household. While creating a budget may be pretty far down the list of fun things to do, it is certainly very important.
The creation of a simple monthly budget will give you a clearer picture of just where your money is going every month, and a chance to recapture that lost money as well. It may be possible to realize savings of hundreds of dollars a month simply by having a good budget plan in place.
After the budget has been established, it is important to immediately use the savings you are able to realize to pay down the debt which carries the highest interest rate. While it is important to always make at least the minimum required monthly payment, any extra money should be directed where it will do the most good, and that means paying off the debt with the highest interest rate. After that debt is paid off, concentrate your efforts on the balance with the next highest interest rate, and so on, until the entire balance is paid off.
Becoming debt free certainly will not be easy, and it will of course take far longer to get out of debt than it took to get into debt. Even so, it is important to take the steps necessary to get the burden of debt under control. Being debt free has a great many benefits, both financial and non-financial, and it is important for every consumer to strive for as debt free a lifestyle as possible.