A debt consolidation plan is an effective tool that can help you achieve debt freedom. Of course, that is if you can stick to the plan until the very end.
Getting out of debt can be very stressful. In fact, a survey revealed that 56% of American adults lose sleep at night because of financial issues. The same survey mentioned that 18% of the respondents specifically said that it was credit card debt that kept them up all night.
It can be frustrating to deal with debt, especially if you have limited resources. This is the reason why you need the aid of a debt consolidation plan. Usually, a situation becomes stressful because you feel like you have no control over it. Having a plan can change that. It will help you stay on top of everything. When you have a full grasp of what is happening, it is easier to get the confidence and motivation that you need to achieve debt freedom.
How to stick to your debt consolidation plan
Of course, creating a debt consolidation plan is not the only challenge that you need to overcome. You should also think about the implementation. That means you should also make sure that you can stick to it. Even the most well-constructed plans will be of no value if you will not use it properly.
Unfortunately, this is easier said than done. A plan may seem like a good idea while you were creating it. But once it is time for the implementation, that brings a whole new set of challenges.
Here are tips that you can use to help stick to your debt consolidation plan.
Live below your means
Take note that this is different from living within your means. You need to live BELOW your means. After all the expenses are done, you still have extra leftover. The thing is, a lot of people are struggling to do this. A perfect example is 32% of Millennials who borrow money so they can attend music festivals like Coachella. If you are trying to get out of debt, this is not really helping your case. It might be true that attending music festivals can make your life bearable. After all, if you are a music-lover, this can help you recharge and put you in a positive mood. It can be useful when you are struggling with a lot of issues in your life. But if one of these issues is your finances, then you are not really helping yourself. You might be making it worse.
It is not just the fact that you are spending on an entertainment expense. If you are borrowing to attend these festivals, that means you are not living below your means. No matter how great or accurate your debt consolidation plan is, it will be useless if you cannot live below your means.
Stick to your budget plan
In line with living below your means, you should also strictly stick to your budget plan. This plan gives you an overview of your income and the expenses that you can afford because of it. If you follow it strictly, it will be unlikely for you to overspend. And if you live below your means, you should have enough extra money to take care of the unexpected expenses. That will make it near-impossible to overspend and ruin your chances of sticking to your debt consolidation plan.
Be prepared to make sacrifices
It is also important that you are ready to make the necessary sacrifices that are needed to stick to your plan. Sometimes, unexpected changes happen to wreak havoc to your finances. And it will not just happen once. You need to identify the expenses that you have to stop paying so you can continue paying off your debts.
Set up milestones
Sometimes, sticking to a debt consolidation plan is hard because it seems like a huge task to accomplish. If your balance is very high, you might want to set debt milestones. These will serve as markers for the small goals that you will set up throughout the plan. If you are trying to pay off $10,000, you can set $1,000 milestones. For every $1,000 milestone that you pay off, you will give yourself a small reward. You can focus on mone milestone at a time. Soon, you will find yourself making the last payment on your overall debt.
Remember that you are responsible
Finally, sticking to the debt consolidation plan is just a matter of changing your mindset. You will find a way to prioritize it if you keep in mind that you alone are responsible for your debts. It will be easier to overcome the challenges because you will not be making excuses to slack off. You need to face the consequences of your financial choices. It should not bother you too much because whatever you are doing right now will benefit your future self anyway.
Tips when choosing a debt consolidation plan
If after all your efforts and it is still hard to stick to the debt consolidation plan, there is a possibility that you have created the wrong plan. It has to have certain qualities that will make it easy to stick to. Here are tips that you should follow if you are choosing the right plan to follow during your debt relief efforts.
Make sure it is realistic
There is nothing wrong with having an ambitious plan. However, you have to make sure that it stays realistic. Otherwise, it will only make you feel miserable. First of all, you will have to strain too hard to meet all the requirements of the plan. Secondly, you will make yourself feel miserable – sometimes, it might make you so frustrated that you will just decide to give up on everything. You do not have to do that. Be honest with what you can afford – even if it means your debt freedom will take longer to come. You still need to feel comfortable with the plan because there is a higher chance that you can complete it.
Align it with your current budget plan
Another thing that you should check is your budget plan. The debt consolidation plan should always be aligned with your budget. It is not enough for you to check it once. You need to continuously check the budget while you are in the midst of a debt consolidation program. There are times when your budget requires improvement or changes. If you have made improvements, you have to make sure it will still be aligned with your debt relief program.
Consider your future plans
Finally, you should also consider any future plans that you may have when you are choosing the right debt consolidation plan. Wouldn’t it be great to pay off your debts while taking small steps closer to your other goals? You need to think about that when you are trying to get out of debt. At the very least, this will help motivate you to complete your debt relief plan. Knowing that you will be getting more than one goal should help you overcome any challenges that might come your way.