What are three-to-five key factors necessary for successful debt management?
• Proper budgeting as a cornerstone to all decisions. • Living within your means. • If you have debt, demonstrate consistent progress in eliminating the debt. • Establish regular savings plus retirement and most importantly, keep it in place. How can people change their minds about saving for what they want vs. incurring debt unnecessarily? It goes back to understanding how to live within your means. One tip I recommend is differed gratification exercises to develop the discipline that what you want can be better savored and more satisfactory if you save for it. For example, let’s say a real joy for you is eating out. Not at McDonald’s, but at fine restaurants. Analyze your budget and evaluate your cash flow. Put $50 or $100 in an envelope each pay period for eating out, but otherwise, eat at home. When the time comes, reach into the envelope and treat yourself to a good meal. Psychologically, you will enjoy the experience more because you’ve been anticipating it. Try it with a vacatio
