The following is a guest post from Financial Expert, Jean Chatzky. She is the Financial Editor of the Today Show and has appeared in Money Magazine, Oprah and other media outlets.
To me – and yes, I’ve been there myself – getting out of debt has always felt a lot like going on a diet. It’s hard to rally yourself to cut out the carbs (or in my case the 10 p.m. handfuls of m&ms) and lose the first few pounds. Likewise, it’s tough to get yourself to trim the spending and pay back a decent chunk of change.
That was the thinking that inspired me to pitch The Debt Diet (based on the principals in my book Pay It Down) to the Oprah Winfrey Show a few years back. And it’s why I’m teaching The Debt Diet as one of the classes I’m offering through Jean Chatzky’s Money School.
First: A goal. How much weight are you looking to lose? How many hundreds (or thousands) do you want to repay?
Second: A timetable. By when do you want to lose the weight or pay back the funds? By your high school reunion? By tax-time or the end of the calendar year? Great.
Third: Benchmarks. Take your goal and divide it by the measure you’re using in your timetable. You want to lose 10 pounds in the next 3 months. Divide by 12 weeks. That’s less than a pound a week. You can do that. Similarly, you want to repay $4000 by the end of this year? Well, you’ve got roughly 40 weeks left in which to do it. That’s $100 a week. You can do that, too.
And here’s something I want you to keep in mind. As you’re making progress toward your goal – which ever one of the goals you happen to be aiming for – take pride in your accomplishments. Two weeks from now when you’ve paid back an extra $200, wallow in that a bit. Feel good about it. If your spouse is in it with you give him (or her) a pat on the back. That’ll help you stay on track tomorrow.