In today’s post, I would like to share some debt reduction tips for military personnel. I’ll be the first to admit that I haven’t always been good at managing my finances or personal debt. In fact, I’ve done more dumb things than I care to remember!
Looking back, I remember some of the dumb financial decisions I made while I was a young Soldier. Some of those decisions include:
1. Buying a new car with high car payments
2. Spending most of my disposal income on unnecessary things
3. Not saving for retirement
4. Not setting up a budget or financial plan
5. Racking up credit card debt
6. Buying things to impress my friends
Like most of my friends and peers, I never received any formal education about debt, financial planning or budgeting. As a result, I went deeper into debt each month and had nothing to show for the money that I did earn.
For the purpose of this article, I want to share some debt reduction tips for military personnel that I learned during my military career. Once again, I am not a debt counselor, financial planner or accountant. These are just some tips I learned along the way that helped me manage my money better.
# 1 Stop Going into Debt
The first thing you need to do is refrain from taking on any more debt. Do not allow yourself to get a new car, a new credit card or anything that puts you into further debt. The only way you will ever get out of debt is to stop acquiring more debt.
# 2 Come Up With a Debt Reduction Plan
You need to develop a simple and practical debt reduction plan. There are many helpful tools online to help you get out of debt. Just go to any of the search engines and search for “debt reduction plan.” You might also want to check on your installation or with your S1 Office to see if your base offers any free courses on money management.
# 3 Track All of Your Spending
You should track all of your daily, weekly and monthly spending. For a minimum of one month, keep a money journal and record everything you buy. You will be blown away at how much money you waste each month going out to eat, on entertainment, and other unimportant things. If you don’t track it, you won’t know where your money is going.
# 4 Get Help If You Need
Don’t be afraid to ask for help. If money management and debt really are big problems for you, get help. The sooner you can do this the better. Getting help is a sign of strength, not a sign of weakness. Don’t worry about what others will think. Only YOU can take responsibility of your own personal finances.
# 5 Get Your Spouse on Board
If you are married, or have a boyfriend or girlfriend, get them on board with you to become debt free. It does you no good to have one person working toward becoming debt free, yet the other person still has out of control spending. Sit down together and discuss your goals and your plan. Come to common ground.
# 6 Educate Yourself
There are tons of great books and courses out there about getting out of debt and taking control of your finances. Three of my favorite money books are:
- The Total Money Makeover by Dave Ramsey
- The Wealthy Barber by David Chilton
- The Richest Man in Babylon by George S. Clason
# 7 Set Written Goals
Written goals are very powerful. Once you have evaluated your current situation, set some short term and long term goals. Write down these goals and put a copy in your leader‘s book, one on your refrigerator, and one on your bathroom mirror. Refer to them daily and evaluate your progress each month.
# 8 Celebrate Your Success
Make sure you celebrate your success in getting out of debt. I’m not talking about going on a shopping spree, financing a new car or spending a few grand on a vacation either. Make it a point to celebrate your progress each month, even if it is going out to eat, ordering ice cream or taking a day trip somewhere fun.
These eight things helped me a lot and I know they can have a similar impact with you. The bottom line is to “man up” or “woman up” and take responsibility of your personal finances and debt. Until you do that nothing will change. Besides, it’s a temporary sacrifice that will really benefit you in the long term.
What are your thoughts? What are your best debt reduction tips you can recommend, that worked for you? Just leave a comment below to let me know what you think.
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