Comment: You work hard to pay off debt. Here’s the amazing secret that will keep you from going backwards when the economy slows down

Credit card debt rose 13 percent last year — the biggest increase in 20 years. If you find yourself in an ever-increasing amount of debt, you need to get yourself back on solid footing before it snowballs out of control.

As I’ve learned from coaching thousands of people on how to get rid of credit card debt and become debt free, the answer is more than just cutting up the credit card.

This mix of mindset and behavior changes along with some critical financial steps will get you there.

Change how you talk about money

To really know your “financial self”, pay attention to what you say and hear about him at work, at home, when you are with friends. There is often a tendency to focus on the negative. If you want to change the way you think about money, change your language, which is the first step in improving money in our lives.

Start using positive language around money today. Start by saying, “I choose not to buy this item” or “This is not a financial priority.” This shows that you are making conscious choices.

On the other hand, saying something “I can’t do” shifts the responsibility away from you. You become a victim of something beyond your control, which shows that you have nothing to do with it.

For example, if you decide to buy a very expensive house, you may not have the money to spend on vacations, clothes, or a big screen television. It doesn’t mean you can’t afford a big screen television – it simply means you spend your money elsewhere. Your decision will reflect what is important to you.

Attitude is a powerful influence, and the language you use can support that change. Use positive words to support the change. As you build savings, saying “I’m saving a little more every month” will change your perspective, no matter how little your savings account grows.

It is important to make an effort to use language that shows ownership and responsibility around money. Positive language, when heard often, changes our attitude around money.

Negative reinforcement about your financial situation, even if it’s self-talk, affects your self-esteem. Stop beating yourself up with negative language like “I’m not out of debt” and “I’m a financial failure.” There is a psychological toll on debt, and studies have found links to depression and suicide.

You are not a victim of your financial situation.

Change your behavior slowly

Don’t consider any debt consolidation plans or home-equity loans until you stop creating new credit card debt.

While debt piles can disappear, people tend to return to their previous balances, even if they are five figures, within six months of paying off their credit card debt in one lump sum. This is due to lack of behavioral change. Spend your time on behavior change instead.

As with changes involving food, slow and steady wins the race by creating new financial habits. Start by reviewing your credit card balance each month. People often find themselves incurring recurring costs for services they don’t use, or worse, something they never signed up for! Take time to charge your credit card.

Are there other automatic payments for services that you can forget about until you pay off your debt? Every $10 you deduct lowers interest payments and gets you to the payoff point sooner.

Choose to live without paying anything for a month as you create a sustainable plan for your financial life.

Credit card debit helps you build a new mindset before you swipe, click or tap. Continue to use that new language around financial decisions to make this easier.

Be loyal to your friends while cutting your expenses. Meet for drinks rather than coffee rather than dinner or drinks. If what you value is time with your friends, they will help and may be happy with alternative, creative plans.

Plan your vacation now. Talk to the family, asking them to “make the holidays easier.” Instead of each person giving a gift to everyone, suggest giving one gift to just one person or having everyone contribute food for the meal. If you’re in the lead, you might wonder who else feels relieved and grateful.

Create a spending plan

Once you start changing your language and limiting your credit card usage, it’s time to face your numbers and create some new lifestyle habits.


  • Always pay the minimum on credit card debt. Otherwise, you will pay more in fines and fees.

  • Pay only the minimum until you create a spending plan that allows you to live within your means and see the bigger picture. (Yes, you read that right.) Sitting uncomfortably aware of your total debt can help reinforce why you need to make changes to your behavior and language. It takes a while to get into debt. It takes a while to get back to zero. Remember, a quick fix is ​​not a permanent solution.

  • Create a plan to cover your expenses with your income. Your net income—not your salary—is what matters. Write down your expenses for the entire year, not just your monthly expenses. The physical act of doing this, rather than reading a summary of the previous year’s expenses, will make you more aware of your spending as your brain processes the information better. Visualizing the difference can help you understand why debt is an issue.

  • Make sure you allow for what you consider a treat – dinner once a week, a movie a month or whatever you like. If you build money for fun, you’re more likely to stick to your spending plan and continue to use positive language.

For a powerful reminder of how a new language, a new behavior, and a new approach to spending can improve your finances, I’ll share one of my favorite examples, a client who told me she “can’t get out of debt.” i try.”

I asked her to try one more time. Each week I challenged her to two simple tasks: first, find a way to save money and second, have fun with just $10 each week.

At the end of six weeks, she showed up in my office, energized and smiling. “I’m trying so many new things! Money is saved by going to the library instead of buying a new book. Then I treated a friend to coffee, which was fun. She went on to list new behaviors that fit into her cash flow plan, from an afternoon spousal to canceling two movie subscriptions.

I asked her to pay her debt. She smiled, “I’m paying the minimum and living entirely on my income. I saved $150!”

She paid off her debt within a year and stayed out of debt.

Studies show that it can take up to 18 days to form a habit, but for some people it takes weeks. The main thing is not to despair if you make a slip. Get yourself back on track without negative language or resorting to old behavior.

Consider other resources for support: Debtors Anonymous, books, podcasts, and therapy to remind you that you’re not alone and that there’s a way out. My favorite book is “How to Get Out of Debt, Get Out of Debt and Live Prosperly Forever” by Jerrold Moody; The most recent edition was published in 2012.

Do you feel like this slow pace will never get you out of debt? Consider this: If money fixed financial problems, lottery winners would never be broke. However, many do. After all, when interviewed five years later, many wish they had never won.

Debt is not just a numbers game. Change your behavior, language and create your cash flow plan now. The long-term effects are felt for many years.

Sid Moriarty is a certified financial planner, MarketWatch columnist, and personal finance speaker. She blogs at MoneyPeace.

Find out how they can shake up your financial career at MarketWatch’s Best New Ideas in Money Festival on September 21st and September 22nd in New York. Join Carrie Schwab, President of the Charles Schwab Foundation.

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