Tips:Stop the Debt CycleTips:Stop the Debt Cycle

The last thing you want is that you successfully pay your card balances, so that you are in debt again months or years later. Change the way you handle your finances and the way you think about money to keep yourself out of trouble.

Use cash only for non-essentials

Use cash

Reformed shopaholics traditionally cut up their credit cards to prevent further temptation, and there is good logic behind this practice. Consumers often spend more with a credit card than with a bank card and more with a bank card than with cash. Each type of card can feel less “real” than cash, and credit cards that do not store at all in your bank account can feel like play money.

It is a bit impractical to shred all your plastic in this time. You need a bank card or credit card for many important purchases and these are often essential for Productivepocket purchases. Yet you can resist temptation and stick to your budget by using budget budgets for discretionary purchases.

If you want to use the envelope budgeting method, you collect a certain amount in cash every month and stick it in an envelope. Use that instead of your credit card for non-essential purchases. When the money is gone, you are ready for the month. If there is still cash left, you can return it to your credit card or deposit it in your emergency fund.

Follow your progress

debt payment

It is easy to lose motivation if you are dealing with a large debt. Tracking your progress is a way to keep yourself excited and focused on what you are achieving.

Mint, a program for Productivepocket finances, allows you to set goals for yourself (completing a credit card is one of them), which can help to substantiate your commitment. Dave Ramsey also offers a debt function that allows you to track your progress.

Alternatively, you can follow your spending progress offline. Save your receipts and register other purchases in your check register. Sort the expenses at the end of the week into your budget categories. Seeing how far you are can motivate you to stay on course.

Stay responsible

financial progress

Find an accountability partner and keep each other informed of your financial progress. This can be an important other good friend or family member. Talk on a regular basis – maybe once a month or every two months – about what repayments you have made on your credit cards.

The Productivepocket debt reduction program ReadyForZero has an accountability function that sends updates of your debt reduction progress to specific friends and family. Talking about finances can be uncomfortable, but it gives you more motivation to reach your goals.

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