Personal Debt vs. Personal Spending

When you are on a Debt Relief Journey, you may be tempted to focus on the debt aspect of the journey. But in order to be successful, you are going to have to focus on changing your spending habits.  Learn more in today’s blog. 

When you have debt, it is easy to think that debt is the issue you are dealing with. But debt is just a symptom of the real issue, your spending habits. Today we are looking at 5 reasons you need to change your spending habits. 

1. You won’t get out of debt if you don’t change

Have you ever heard of someone going on a diet but not changing their eating habits?  Anyone who has had to lose weight knows that eating habits determine whether you lose weight or not. The same is true for getting out of debt. If you don’t change your spending habits, you won’t get out of debt. 

Your spending habits are what got you into debt. You chose to spend more money than you were making and borrowed money to enable that spending. Getting out of debt works the same in reverse. You choose to spend less than you are making and apply money to paying off your debt. The essence of debt reduction is doing just that. 

2. Helps you be able to spend more

By changing your spending patterns now and paying your debt off, you FREE UP the funds you are currently using to pay your debt.  You can use those funds for whatever you choose now. Why keep paying for the things you did in the past?  And paying for them longer than you thought you would?

Notice this: The longer you stretch out your payments, the more interest you end up paying.  Paying interest increases the amount you pay and decreases the money you have available to do things now.  When you pay your debt off, the money you were using to make your debt payments becomes available to pay for other things, allowing you to spend more without having to increase your income.  Think about this for a minute.

By reducing your spending while you get your debt paid off, you stop increasing what you are paying on the past and free those funds up to use now. 

3. Makes the bank pay you

While you are in debt, you are paying money to the bank every month. You are paying the bank. When you pay off your debt and start putting money away to make future purchases, you do a flip on the bank. Instead of you paying the bank, the bank has to pay you instead. Your money and purchasing power grows as the bank pays you instead of your money shrinking when you pay the bank. 

If you ever wondered why you never learned about living without debt, this is one of the big reasons. The bank would rather collect money from you on your debt payments than having to pay you.  Banks want more people paying interest to them on loans than people that they have to pay interest for saving money.

4. Debt doesn’t help you

While debt may seem to be a solution that helps you make a purchase, it really is not.  Debt increases the price you pay for your purchases.  Debt ties up your money for months and years.  Debt takes your ownership rights.  These are all things that benefit the lender, not you.  Why use something where the benefits are stacked in favor of the lender instead of you?

5. Gets you out of the debt cycle

When you change your spending habits and get yourself out of debt, you break out of the debt cycle.  The debt cycle goes like this.  You buy something using debt.  The product lasts about as long as the debt payments.  When you pay the debt off, it is time to purchase the product again.  You need to borrow money to make another purchase.  This is the debt cycle that lenders want you to live in.

When you pay off your debt, you break out of the debt cycle.  Instead of paying the bank, you save money so you can make your big purchases.  Instead of paying interest, you are earning interest.  Your purchase price is smaller, because you are not paying interest.   These are all benefits of being debt free.

CHANGE is possible - IF you want it to be! - Dan - The Budget Man

Your spending habits will make or break your finances.  Change your spending habits by reducing your spending and eliminate your debt.   You will be glad you did!

One of the best ways to focus your attention on the positive aspects of your Debt Relief Journey is to make sure you have all the tools you need for your journey. Take my free debt relief workshop to make sure that you are knowledgeable!

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IN CONCLUSION

1. Your habits determine your outcome, whether you are dealing with food or finances.

2. Changing your spending habits can enable you to be able to have more to spend in the long run.

3. By changing your spending habits, you can have the bank pay you instead of you paying the bank.

4. You are paying too much for your purchases when you use debt.

5. You can break the debt cycle by changing your spending habits.

RESOURCES

Article: How to Create Better Spending Habits

Article: How to Stop Spending Money

Book: 5 Things Women Do In Relationships That Drive Men Crazy

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You’ll be amazed how free you feel without debt! And just imagine the things you could do if you had no debt!

Anything you tolerate becomes normal to you. When you stop tolerating debt, you increase your ability to function without it.  You can get yourself debt free. It will take some time, but the time you spend is worth it!- Dan Heiland

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