Debt: Now Is The Time To Clean It Up

So fresh and so clean

The start of a new year is the perfect time to get a fresh start in cleaning up your finances. And Maine's Credit Unions can help you do that! 

For many, this means cleaning up the enormous debt from last year’s bad decisions. Staying on a straight and narrow financial plan can be difficult, but it is certainly not impossible. Here are a few tips on how to stay motivated and stick to the plan to tackle your debt!

Think Long Term

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Take a second to sit down and put some thought into your future, as scary as that is! Think about all of the things you want in your "perfect world." It's okay to dream big! Envision yourself in the future from what car you'll drive to the vacations you'll want to go on.

By holding onto your dreams, you will make smarter choices that will help you achieve your long term goals. Key words here being: long term. (That waterfront property isn't going to magically happen tomorrow, if you want it it will take years of hard work to achieve.)

Now think about how your debt will keep you from having any of those big dreams come true. Your past and present spending habits can very easily keep your "perfect world" from being a reality. The shoes you want today may cost you that waterfront property later down the road.

Keep your eyes on the prize and don’t compromise.

Add it Up

What you are working with? Break out the notepad and tally up every penny you owe. Whether it is student loans or the $50 you borrowed from your mom last month for groceries, add it up. Rather than knowing you are in this ambiguous state of "debt," seeing the large number can help you see just how much work needs to be done.

Yes, this may be daunting but you can do it! Now, once you see the big picture, break it up into a priority based repayment plan.

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Set a Timed Goal

Decide how long you want it to take you to pay off, or at least put a huge dent in this debt. Once you set the time limit, divvy it up into monthly payments. This amount should be included in with your bills (if it isn’t already). Make it a priority. Just because your student loans are in deferment doesn’t mean you should take forever to pay them back.

The sooner you can tackle your debt, the better. You don't want to be worrying about debt from your early twenties when you're married with kids and a mortgage to pay. 

Be ambitious but don’t get crazy. I know for most of us this is hard to do. We simply don’t make enough money to pay everything, especially student loans. Well this is where the tough love comes in. This is when you have to consider that second job at McDonalds or finding a side hustle. You have to want your future life so badly that nothing will keep you from it. By all means necessary! Get ‘er done!

Be well, 

Lauren R.