I’m doing a 3 part series on battling your money fears. I’ve talked about battling your income fears and today we are going to be looking at your fears surrounding debt. Tomorrow we will look at our savings related fears.
Fears surrounding debt revolve around two main topics. Fear that you will never get out of debt is a big one. Then once you are out of debt you might fear that you will get back into debt. Reasonable fears for those who have had debt problems in the past, but these fears do not need to over take our minds.
Battling Debt Fears
Debt comes from one thing and one thing only; living outside our means. So, if you fear debt then you will want to make a budget so that you can be sure you are living within your means. Knowing, really knowing and not just hoping, you can pay all of your bills will relieve the fear that you will ever have to take on debt again.
Part of your budget should include either sending extra towards debt or, if you are debt free, a solid savings plan. Having a plan to pay off your debt will help reduce the fear of never being debt free. A written plan of debt reduction with an end date will prove to your subconscious that debt freedom is attainable. Living with a budget will allow you to ensure that your debt freedom plan is being followed.
If you are already debt free but fear going into debt again a budget with a solid savings plan will help you put those fears to rest. Having 3-6 months of bills in savings will allow you to make it through most of life’s ups and downs without having to take on debt. Even if your spending gets the better of you for a moment you will have the reserves to recover.
Tracking your progress while paying down debt and building a savings reserve will also help. Seeing that you are making progress will help you feel in control of the process and therefore help you reduce those fears.
Tomorrow we will look more closely at reducing our fears around savings.