New Year's 2011 and Debt

The new year is a time to start fresh for many, with resolutions to do things better than they were done in the past.

But what if you start the new year with a constant reminder of yesteryear’s indulgences, such as a credit card balance that will take months or even years to knock down to zero?

It can be a little frustrating when you’re dedicated to reducing your debts but it’s happening at a paltry pace. But it’s really no different than the resolution to get on a fitness plan and finally lose those extra pounds.

It was a long process to get into this mess; little-by-little that balance (or waistline!) grew before you realized - or admitted - that it was past your comfort zone. It will have to be undone in the same way, little-by-little.

You can't expect to have a swimsuit model’s body after a month of healthy diet and exercise. You should see some improvement, though.

You’ll probably feel stronger and more energetic, your jeans may fit better, and you’ll begin to take pride in making good decisions for your physical health.

And once you start to see that initial improvement, it becomes easier to keep making good choices. You may choose to eat an apple instead of a donut. You may prefer to take a walk instead of sitting and watching TV.

Smart habits will compound until you get back that svelte figure from your earlier years. Your confidence will be apparent to everyone around you.

And once you get to the point where you are happy with your fitness level and physique, you are more likely to want to keep it that way. It was getting there that was so hard, because it required you to develop new habits.

The same attitude can be taken for debt management.

You may be chipping away debts at such a small amount that it’s hard to imagine when you’ll get that balance back down to zero. But, at least it is smaller than it was in the month before.

As you watch your balance dwindle over the months, you’ll begin to feel more confident in your money management skills, you’re likely to be hesitant about adding to the balance with compulsive spending, and you’ll begin to take pride in making good decisions for your financial health.

When you begin to see the results of your hard work and discipline, you won’t want to undo all of your accomplishments. You might find that it becomes easy to walk away from a sale at your favorite store and go spend a day at the park instead. You may instinctively pack snacks or go home for a meal instead of eating out when you’re running errands.

It will begin to add up when you routinely spend as little as possible on extras in order to pay down debts. And once you get that balance down to zero, you’ll be able to take advantage of your credit card’s interest-free grace period, you’ll be able to save or invest more for retirement, and you can begin to allow yourself reasonable indulgences guilt-free.

You may never let your balance grow out-of-control again. It was getting to that point that was so difficult, but by then you will have developed smart, new habits to keep you on track.

You have the determination, dedication, and discipline it takes to accomplish your goals.

So let’s welcome 2011 with excitement for what the future will bring!

Happy New Year!