Make a Debt-reduction Resolution Pay Off

Personal Finance December 12, 2008|Print
According to MyGoals.com, the rate of respondents who want to pay off debt doubled from last year's 26 percent. Weight loss remains the top goal, according to the survey. An agent with the University of Arkansas Cooperative Extension Service offers sensible steps to accomplishing this important goal.

Released Jan. 4, 2008

MURFREESBORO, Ark. - Paying off debt is the No. 2 goal for New Year's resolutions according to one survey, making up 52 percent of all finance-related resolutions.

According to http://www.MyGoals.com, the rate of respondents who want to pay off debt doubled from last year's 26 percent. Weight loss remains the top goal, according to the survey.

Robbie McKinnon, a Pike County agent with the University of Arkansas Cooperative Extension Service, offers sensible steps to accomplishing this important goal.

"If you want to pay off debt, you're not alone. Many people face a financial crunch some time in their lives," McKinnon said. "Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming.

"The good news is that often, debt can be overcome," she said. "What will work for you will depend on your level of debt, your level of discipline, and your prospects for the future.

The first step toward taking control of your financial situation is to do a realistic assessment of how much money you take in and how much money you spend. Start by listing your income from all sources.

Next, list your "fixed" expenses - those that are the same each month - such as mortgage payments or rent, car payments, and insurance premiums. Then, list the expenses that vary - including entertainment, recreation and clothing.

Writing down all your expenses, even those that seem insignificant, is a helpful way to track spending patterns, identify necessary expenses, and prioritize the rest, McKinnon said. The goal is to make sure you can make ends meet on the basics: housing food, health care, insurance, and education.

Regardless of the resolution that you make on New Year's Day, you may remember that sometimes the resolutions are not held in your attention long enough to accomplish them. To keep the resolution, McKinnon recommended following three simple steps:

1) Be committed. You must think through what you want to change and commit yourself to the long-term process it usually takes to achieve change. You then need to come up with a realistic plan to help you reach your goals..

2) Be prepared for setbacks. Don't think of them as complete failures, don't dwell on them, and don't let them make you give up your goals. After a setback, try to get back on track to reach your objective.

3) Track your progress. Motivate yourself by celebrating your successes and by getting positive feedback from supportive family and friends. A good approach is to evaluate yourself every week or two weeks. However, don't over-monitor yourself by doing a self-assessment every day. That's just likely to end in frustration. Don't compare yourself to others. Accomplish your goal in a way that's best suited to you.

For more information on managing finances, visit http://www.uaex.edu. The Cooperative Extension Service is part of the U of A Division of Agriculture.

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http://www.uaex.edu/news/january2008/0104debt.htm

Contact: Lamar James, (501) 671-2187, ljames@uaex.edu