A New Year's Resolution to Diet Your Way Out of Debt

The average consumer debt load in America is $10,000. If you carry that much debt, and make the minimum payments, it will take more than 36 years (434 months) to pay down. Your interest payments will be over $13,000. If your debt is more modest, a $5000 balance will take nearly 30 years (351 months) to pay off. If those statistics have your heart racing, then debt represents a very real threat to your happiness and well-being.

How do you decide if your debt is dangerous? Economic counselors consider debt to be dangerous if your debt payments is between 15 and 20 percent of you monthly income. If your debt is in that range, consider it "overweight". If your debt payments are over 20 percent, your debt is morbidly obese; it is probably killing you.

If you are in need of a debt diet, you need to begin a regimen to change your financial outlook and your behaviors. If you only make superficial fixes to improve your situation, you will end up in the same financial crisis (or worse) as soon as your old habits take over. Begin with a few honest and hard questions:

How bad is it? You need to make a list of all of your debts. Include student loans, mortgages, car payments, hospital pills, and even home shopping payment plans. Be honest with yourself, even if it means being embarrassed.

How long did it take for me to get here? It took a long time to create your habits; you can expect it to take a long time to break them. There are no quick fixes.

What am I willing to sacrifice? You are in debt because you spend more than you earn. Changing this will take sacrifice. Do you need an extra job to create more income? What can you cut back on to decrease spending?

What if I mess up? You will. Life happens, and you need a plan that doesn't include credit cards. You need an emergency fund to deal with life's surprises. $1,000 should suffice.

Am I serious? Wanting to change is easy, following though isn't. Create a visual system for tracking your progress. Review your plan daily; on a calendar, mark every successful day with a red "X". Put your debt load on a big board, and update it monthly. Your debt loss needs to be on your mind everyday.
⁃ Do I need help? Regardless of your situation; support will help. Look into an accountability partner, internet research, and tools like this website.

Knowing your are overweight is easy; one day and your pants don't fit. Understanding your financial fitness is more difficult, but equally important. Start your change today. Be honest with yourself, get support, and dedicate yourself to changing both your behavior and your situation.