How to Get Out of Debt: Monitor and Adjust

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How to Get Out of Debt: Monitor and Adjust

Every great plan is just that: a plan. Real life rarely goes according to plan. Set aside time periodically to assess your progress. You may need to make adjustments, and checking in allows you to make course corrections as you go.

 Check your debt statements

See where you are in terms of paying off your debt. It may take a while to see progress, but every dollar you put toward paying off your debt puts you a dollar closer to financial freedom and peace of mind. You will eventually see progress, especially if you compare where you are now to where you started.

Seeing that may inspire you to try to squeeze even more into debt payments. Small decisions become big decisions over the long term.

Check your budget

See if your spending is on track with your budget. Maybe you’re finding a way to squeeze more out of your dollars and want to make a last push toward a debt that you have almost finished paying off.

What if your refrigerator died and you need to dip into your emergency fund to replace it? You may need to temporarily slow down on debt repayment while you build your cushion back up. The good news about having an emergency fund is that you will not have to go deeper into debt when a large cost hits you unexpectedly.

Change what is not working

Maybe you did not budget enough for basic household supplies because toilet paper and toothpaste went up in price, but you over-budgeted for food and haven’t spent as much there because you have been eating a lot of beans and rice. Adjust your budget accordingly. You will get better at knowing how much things cost the longer you pay attention (and the more data you have for comparison).

Based on your spending, you may need to adjust your debt repayment plan. This adjustment may be for a month or two, or you may find that you need to permanently adjust it.

Own your mistakes…and then move on

Did you slip up and over-spend? Own your mistake and learn from it. Be honest with yourself and then decide to get back on track. Continuing to spend because you splurged once will only make your situation worse. It can be tempting to give up if you are unable to stick to your resolve all the time. Remember: no one is perfect.You should not let one failure derail a solid strategy.

It is easy for me to say, “don’t dwell on the past,” but I know that is more difficult to do in practice. But unless you learn to let go of your mistakes, you will have a hard time moving on. Recommit to your plan, and get back on track!

Photo used under Flickr Creative Commons.

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Wealth Manager

Austin Fey is a Wealth Manager at Marotta Wealth Management, specializing in charitable giving and asset allocations. She is a regular contributor to our Marotta On Money articles, often giving advice to those just getting started in finance.

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