Breaking the Debt Cycle – Stop Living Month to Month

woman with no money

The last thing you want to do this New Year (or ever) is follow the example of the United States government by making the same financial mistakes repeatedly. If something doesn’t work for you or your situation, you need to find a more viable way. This applies not just to your finances, but to all aspects of your life.

How to Break Cycle

Breaking the debt cycle is simple. Essentially, it all comes down to one thing: you have to spend less and make more. Since you can’t just decide to make more money overnight, you have to start by spending less every day. Financial experts agree that to get out of debt and stay out, you need to rein in your spending.

The following tips will help you break the debt cycle. However, it’s important to prepare mentally for improving your financial condition. Remember, the way you view and spend money is often a deeply ingrained mindset developed over many years. To make changes, you must also change your thought process. Start by envisioning your life exactly how you WANT it to be. Imagine what it would be like to live debt-free. Use positive visualization to create a realistic goal for yourself so you can truly believe in the possibility of living without debt. This is something you’ll need to work on constantly. In the meantime, follow these expert financial tips:

  • **Use Cash.** This doesn’t mean you always have to pay with cash—especially in a world where debit cards are convenient. The key is to avoid using credit cards for any purchases, even small ones. Start paying for things only with the money you have on hand. This will help you understand what it truly feels like to live within your means.
  • **Set a Budget.** This is one of the most important steps to breaking your cycle of debt. Take a month to record everything you spend, giving you a reliable idea of how much things actually cost. At the end of the month, add up your expenses to see where your money is going. You’ll likely find many areas where you can cut back. When setting a budget, remember to allocate some money for yourself and to set aside a little for savings. Even if you can only manage $5 or $10 per week, it’s worth it in the long run.
  • **Don’t Impulse Buy.** Prices vary greatly on everyday items, from shampoo to groceries. Never pay for something when the price is at its highest! Shop around and do your research. Not only will this save you money, but it will also help you avoid buying on a whim. Often, after a few days of consideration, you’ll realize that your desire for an item isn’t as strong, or you might find it at a better price. This practice will help you respect the money you work hard for.
  • **Wait Before Big Purchases.** Don’t spend $50 on a single item without giving yourself a 7-day waiting period. Consider how long it takes you to earn that amount. Use this time to think about whether the purchase is truly necessary.
  • Pay off debt with money you have on hand. If you have savings or a fund available, use it to pay off your debt. It might feel disappointing to let go of a large sum, but it will bring relief and allow you to start saving money. This will also change your attitude about money, making you less likely to fall back into debt.
  • **Take Care of Essentials.** Neglecting small issues can lead to bigger expenses. Bald tires on your car raise your fuel bill, while a running toilet increases your water bill. These seemingly minor issues add up over time. Respect your money by taking care of these necessary repairs and avoiding unnecessary late fees.

Being in debt can feel like living underwater. Most people feel so overwhelmed that they don’t know where to start. These tips will help you get started and change your attitudes about money, which will ultimately help you break the debt cycle.

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