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Debt Management Plan

Debt Management

Sticking to your debt management plan

Sticking to your debt management plan can be very similar to sticking to a diet: you know you should do it but you really don't want to. However, in many ways your debt management plan is even more important than a diet. Letting your debts get out of hand can lead to disastrous results such as having your house or possessions repossessed and your reputation ruined.


You've made the effort to put a debt management plan into place; whether it's self imposed budgeting or a comprehensive plan from a debt management counselor you need to stick with it to get results. Here's how:

Believe in what you are doing

Getting yourself out of debt is a conviction before it becomes an action. You really have to be determined that you are going to succeed and focus on your goal. By being frugal now you can get yourself out of a whole lot of trouble.

Set some goals

It's difficult to stick to a debt management plan without defining clear goals. Think of the satisfaction of ticking items off a list and do the same with your debt. Set feasible short-term goals. Go back to your budget and see where you can make savings. Write down what you are going to save money on in the next week and tick each item off at the end of the week. Do this every week and track your results.

Track your progress

Each time you tick an item off your list transfer that figure to a separate savings list and if possible transfer the money saved to a savings account. Internet banking makes this an easy task as you can just log on and move the money around your accounts. These small daily savings add up quickly and you'll see real progress as your debt management plan kicks into action. Keep track of weekly and monthly totals so you can see what a difference those small savings are making.

List the benefits

You know where you've got to make savings but what exactly are you going to get out of it? List the benefits of your debt management plan and keep them somewhere obvious so you see them every time you go into the kitchen for example. This will help you stay positive about your debt management plan. List all the good stuff: no more embarrassing situations where cheques bounce or credit cards are refused at tills, no more dreaded phone calls from creditors, and none of the constant worry of debt.

Change your habits

Your spending patterns are linked to your living habits, change the habits and your spending patterns will also change. Take a different route to work so you don't pass the drive-in or coffee shop and avoid the morning splurge on take-out food or drink. Get healthy: decide you're going to avoid those expensive pre-prepared meals, junk foods and eating out. Or take to the hills: head to the park instead of the bar, go hiking at weekends instead of shopping. Cutting down expenses will be simple if you cut out temptation.

Predict the pitfalls and plan to overcome them

No one is perfect and few of us relish any kind of cut backs in spending or change of lifestyle, so predict where your biggest problem areas are going to be and make a plan to overcome them. If clothes shopping is your biggest weakness think of ways of avoiding the shops, throw out your mail-order catalogues and don't ever switch to the home shopping channel.

Work as a team

Rather than hiding away your money problems be honest with the people you're live with. They can help and support you in your goals and won't feel like you're suddenly being stingy for no reason. Explain to your spouse and children that is important they join in too. The weekly grocery shop needs to be adjusted, entertainment may take a back seat for some time: if everyone knows why these things are happening they won't resent them so much. And you'll be teaching your children valuable lessons for the future.

Tell your friends

Don't be afraid to tell your friends what is going on; not only may they open up and tell you they've had similar problems but they'll ask you how things are going when they see you and that should help keep you motivated. Who wants to admit they've slipped off the debt management plan they raved about the previous week? If nothing else the guilt factor should keep you going.

Be positive

Keep a positive attitude. Stay focused on the long-term goal of why you are attempting to cut back on spending. Don't see each little thing as an enormous sacrifice but as a means to an end. Treat yourself now and again with the little luxuries you've cut out. Avoiding the coffee shop en route to work each morning won't seem so bad when you're thinking of the double chocolate cappuccino you've promised yourself on Friday.

Plan beyond your debt

One of the biggest motivational factors is visualizing yourself out of debt. From your budget sheet calculate how much you can save per week and per month in order to reduce your debt. Then think about the time when your debt has been paid off and this money becomes real savings. How long before you can get that wide screen TV and pay for it in cash? How long before you can plan that overseas holiday? See your debt become savings and it will help you stay motivated in the long-run.

Stay focused

Above all stay focused on your goal and why you are implementing a debt management plan in the first place. Keep the big picture in mind and you should be able to look after the day-to-day savings with ease.