This is the first article in a two-week series on setting effective goals for getting out of debt. You can share your debt resolution with others here.
The New Year is almost upon us and with it comes the inevitable introspection when we decide our priorities for the upcoming year. We consider our dissatisfactions and dreams and put pen to paper to create a list of things that we imagine with make us happier, healthier, or better in relationships.
Last year, Franklin Covey reported that getting out of debt was the top resolution, topping the perennial weight loss heavyweight. Similarly, MyGoals.com reported that the debt reduction was the top financial goal for 52% of respondents.
How did we do against our debt reduction resolutions last year? Not so well according to government stats: aggregate consumer debt was up 2.3% to $2.6T and credit card debt increased 3.7% to $876B.
This year, with the credit crisis and economic recession, you may be thinking of making debt reduction your resolution. If you are, you’re not alone. According to a May 2008 Transamerica survey, debt reduction is the top financial goal for households with less than $100,000 in annual income and it was also the top use for the government stimulus checks earlier this year.
If you’re thinking about making debt reduction your New Year’s resolution for 2009, we enthusiastically encourage you to “Just Do It!” Here are a few benefits:
- Better financial future: The road to your financial future goes through your debt. In the short term, paying off consumer debt will save the average borrower $4,000 per year in interest. In the long term, it will position you to achieve other financial goals such as retirement or college for children.
- Better health: Several recent studies have documented the impacts of debt stress on heath and relationships. Debt stress can lead to sleep loss and has even been linked to preterm births.
- Healthier relationships: Eliminating the stress of debt frees you to focus on your relationship and removes the bickering that occurs over competing goals.
- Confidence: By just starting the process of paying down your debt, you’ll find yourself feeling more in control of your life and the satisfaction of making progress.
- Security: Debt forces us to live on the edge, at the risk of hitting a slight economic speed bump that can send us into a tailspin. Without debt, you will be better able to weather economic hiccups.
This year, you can improve your life by taking steps to eliminate debt. Over the next two weeks, we will discuss the best techniques for getting out of debt. Be sure to follow these posts as we show you how you can buck the odds this year and take steps to build a debt-free future.
We wish you all the best in the upcoming New Year.
Scott Crawford is CEO of DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs. DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.
Tags: Consumer debt, Debt Management, Debt Paydown, DebtGoal, Goal, New Year, New Year's Resolution
