Tag Archives: How to Get Out of Debt

Make Goals and Take Action in 2010

Before we know it, 2010 is going to be upon us.   So I want to devote this post to encouraging people to take time over the next three weeks of December to dream about what they want, and then come up with a detailed action plan of how to get there.

I’ve noticed it’s the action part that often trips us up in pursuit of our goals.  Action plans tend to get left out when New Year’s resolutions get made.  Which is a shame, since we’re capable of more than we realize once we know what we should be doing.

I’m going to provide an example of the 5-year goal & action exercise.  Both BOOKLIFE by Jeff VanderMeer and HOW TO GET OUT OF DEBT by Jerrold Mundis have this particular exercise in their books.  Mundis’ book also has many other planning exercises readers can try 0ut as well.

Step 1: Spend quiet time thinking about what you’d like to be doing and how you’d like to be 5 years from now.  Write everything down on a piece of paper.  Then go back to your list, and try to be specific if you can (for example, “be an author” is a bit vague, while “publish 2 novels and 10 short stories” is more specific).  Goals are like a seesaw in trying to keep away from vagueness (i.e. “be happy”) versus unrealistic specifics (i.e. “marry Alan Rickman by 2012”).

A real Step 1 goal I had a few years ago:  Completely pay off all the credit cards in five years.

Step 2: Choose the three to five goals dearest to your heart.   Now come up for each of them a subgoal that is doable in one year.

Step 2 example:  1) Learn how to deal with debt, 2) track my finances, and 3) stop the credit card balances from increasing.

Step 3: Now ask for each 1-year goal, “What actions can I take this year that will bring me closer to my goal?

Step 3 example:  1) Find and read best books on debt and how to get out of it, 2) lock credit cards away, 3) learn how to do budgets, 4) do budgets each month, 5) brainstorm ways to save money and earn more money.

Step 4: Now ask, “What can I do this month towards my 1-year goals?”

Step 4 example:  1) Find and read best books on debt, 2) lock credit cards away.

Step 5: Now ask, “What can I do this week towards my 1-year goals?”

Step 5 example:  1) Research books on debt at the library, and 2) lock credit cards away.

Actions are cumulative, like pebbles rolling down a stone-strewn mountain to trigger a landslide.  Each small action I took to get the credit cards paid off had cumulative effects over time.  I learned how to control my credit card usage.  Created spending plans and spreadsheets that tracked how I spent money in about 25 different categories.  And had to make many other small changes in my behavior.

It never ceases to amaze me how tiny actions taken on a daily basis can lead to big changes in a few years.  I encourage readers to give this method a try and let me know in December 2010 how it went.  Good luck!

Jerrold Mundis’ HOW TO GET OUT OF DEBT

Freelance writer Jerrold Mundis wrote my favorite book on how to deal with writer’s block, BREAK WRITER’S BLOCK NOW, which I blogged about last year.   Well, he also wrote my favorite book on how to deal with debt and cash flow, called HOW TO GET OUT OF DEBT, STAY OUT OF DEBT, AND LIVE PROSPEROUSLY, Revised Edition.

I’ve heard it said that a writer needs to pay off all unsecured debts (such as credit cards) and save up a year’s salary before quitting a day job.   HOW TO GET OUT OF DEBT can help with any debt problems and also provide guidance on tracking monthly expenses to start saving.

The methodology of the book is based on the principles and techniques of Debtor’s Anonymous (DA).   Mundis was a counselor for DA for a number of years before he wrote the book.   So the book focuses on keeping it simple–the psychology of debting, taking care of debt, and making budgets.  If you’re looking for a book on investing, this isn’t it.

I read the book over a year-and-a-half ago, and tried out the techniques.  They worked very well.    All our unsecured debts are now paid off, for which I’m very grateful to DA (for developing the methods in the first place) and Mundis’ book.

The one part of the book I disagreed with was completely getting rid of all credit cards.  I kept just one credit card, locked away, and learned to save up the money to pay for a purchase before putting it on the credit card.  However, if someone cannot keep from abusing credit cards, I can understand why Mundis urges all credit cards must be canceled.

The book is also interspersed with tales of Mundis’ life as a freelance writer (writing both novels and non-fiction).  Since he’s made his living that way for almost his entire career, these brief asides made for fascinating reading.  Here’s an example:

… I spend the morning developing an idea for a magazine article, type up a proposal, and send it off to an editor.  That is an action I can take, that part is mine.  What happens afterward–the result–is totally beyond my control.  The editor may give me the assignment.  She may ask me to rework the idea and submit it again.  She may reject it but ask me to submit others.  Or she may reject it without comment….

It is the very concern with results–usually played out in an imagined negative scenario–that inhibits most of us from taking action in the first place…. Thus, paradoxically, we eliminate any possibility of a positive result because of our fear of a negative result; we never achieve what we desire because we don’t take the action that might turn that desire into reality….

The above two paragraphs are a handy quote to share with anyone who has had trouble with submissions block.

There are other behavioral techniques that Mundis briefly discusses towards the end of the book that can be used to improve one’s productivity as a writer.   An unexpected fringe benefit.