The following tips will increase your confidence in your ability to take back control of your life.

1. Determine The Size Of The "Opportunity"      

Problems are actually opportunities waiting to be discovered. Adopting this attitude will help you see that you can make choices that will positively impact your life.

Action: recognize that not all debt is equal.  Classify your debt by the interest cost of the debt. The highest interest cost debt is the first opportunity to pursue.

2. Follow The Money

You’ve likely heard the expression “follow the money”. Begin by reviewing your expenses. When expenses exceed income, savings reduction, debt accumulation or both is always the result.  Next, what opportunities exist to increase your income?

Reducing your expenses is often easier than increasing your income. 

Action: make a monthly list of expenses for each of the past 3-6 months and categorize each expense as either “must have” (example: food) or “like to have” (example: entertainment).

3. What Are The Viable Alternatives?

It is easy to get “locked” into your behaviour as it is related to how you spend your money. Your past experiences have shaped your habits and consequently your beliefs about the future . 

Be willing to confront your past behaviour by changing saving and spending habits.

Action: Identify less expensive alternatives for some “must have” and “like to have” purchases with the objective of reducing your total spending.  Establish a savings goal.

4. Start Small

Provide yourself opportunities to succeed. If you start with a small change in behaviour, you can experience success more quickly and provide yourself with needed encouragement.

Action: eliminate one or more small expenses from your “like to have” list.  Use the savings to reduce high interest cost debt and/or increase savings.

5. Celebrate

It is important to recognize the progress that you make on this journey. Keep the celebrations small but do celebrate. They will become a habit that you’ll want to repeat.

Action: set a modest goal that you can achieve quickly. Take the necessary action to achieve your goal; have a small celebration and then repeat the process.