New Year’s resolutions run the gamut from the outlandish (sky dive, climb a mountain) to the traditional (lose weight, help others more). An atypical resolution that will make a difference this year is more than a one-line “pledge to get out of debt” – it is a straightforward plan to do so.

 

Promising to end debt a boring and cliché resolution? Be stylish and realistic in your pledge and design a good plan. Here’s an idea:

 

“My 2009 resolution is to improve my personal finances and the first step is to aggressively eliminate my outstanding debt. Once I am completely free of debt, I’m going to save up for and pre-pay a tropical vacation to celebrate. Staying out of the red is going to be a cornerstone of my lifestyle moving forward. I pledge to the following plan:

 

a)      Write all of my debt down on paper, with the name of the lender, outstanding amount to be paid off, and terms of repayment.

b)      Prioritize the debts from most to least pressing to pay off. (Number them)

c)      List my monthly expenses and income. Set up a budget that trims unnecessary expenditures and comes up with a consistent amount that I can contribute towards monthly debt reduction.

d)      Start this action plan with the month of January 2009, with a modest reward for myself if I follow through with the game plan for each of the first six months of the New Year.”

 

Research shows that half the battle is proving that you can set up a plan and follow it.

 

If your debt is enormous, this is not a reason to avoid the most important resolution you can make. Simply adjust the resolution to represent a pledge to eliminate a large percentage of it (e.g., 50%) within the next year.

The best part of using a New Year’s resolution as a promise to eliminate debt is that you can let your promise be known to friends and family in a way that feels less difficult because everyone makes a resolution. It feels good because it comes off more as a declaration than a confesssion.

Raj Patel writes for 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: debt, debt elimination, Debt Paydown, debt plan, debt pledge, debt promise, debt reduction, debt-free, New Year, New Year's, New Year's resolutions, personal finance, personal finance pledge, resolutions

This entry was posted on Monday, December 29th, 2008 at 4:47 am and is filed under Debt Management, Paying Down Debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.