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How to Rethink Your Habits & Change Your Mind About Debt

Debt is a reality for many Canadian families. And, each new year, debt reduction is the top financial priority. However, the reality is that household debt continues to climb, increasing financial stress and making it difficult for families to get ahead.

This year, when everyone around you is making sweeping resolutions, commit to making small changes instead, to put yourself in the right mindset to achieve and maintain realistic goals.

3 reasons why sweeping resolutions fail

It’s great to set goals for yourself, but staying motivated to reach those goals takes perseverance. Here are a few reasons why resolutions often fall to the wayside after January:

  1. You don’t allow yourself enough time

Reaching a goal such as weight loss or debt reduction doesn’t happen overnight. Staying motivated by making small, achievable changes is the key to seeing lasting results. If you’re filling your schedule with too many commitments, you’ll start to view your goals as just another thing on your to-do list. When your goals become a chore, old habits creep back in.

  1. You’re not in the right headspace for change

Starting a diet but continuing to buy the same old unhealthy foods is counter-productive. The same is true when it comes to finances. To make change, you’ll need to identify the habits you want to change and then set a course to make it happen. This might mean identifying areas where you are overspending or making a point to save money each month.

  1. You think of debt repayment as a sprint to the finish line

You’ve heard that slow and steady wins the race, but most people don’t want to wait. It would be great if we could skip the steps, but that’s not reality. Even if you decide to look into debt relief options such as credit counselling, a consumer proposal or bankruptcy, becoming debt-free will take time and patience. There is no quick fix.

How to simplify your debt relief strategy

When life gets busy, it’s easy to lose focus of what’s important and get caught up in the day to day buzz. Don’t make your debt relief goals overly complicated. Instead, focus on ways to simplify your money and you’ll soon see the results of your efforts. Here are some tips:

  • Evaluate your priorities. Use a planner or an app to write down which goals are most important. Make sure your goals are realistic and specific so you don’t lose motivation. Learn more about setting SMART goals by using this module from the Financial Consumer Agency of Canada.
  • Give yourself time to process new changes. Plan ahead for the upcoming days, weeks, and months by creating a rock-solid budget that will keep you on track. When you’re dealing with debt, it can help to create a visual guide that will allow you and your family to see your progress. Download free debt progress printables here.
  • Don’t let setbacks derail your efforts. Life happens, and sometimes, it can cause setbacks. The key is to get back in the saddle and not let your efforts get derailed when something goes wrong. Readjust your plan and keep going.
  • Gather a support system. This can mean seeking help from a debt professional who can explain your debt relief options in detail, or, it can mean staying accountable by announcing your goals. Your family and friends can help keep you motivated by cheering you on or helping you choose healthier money habits, much like a gym buddy who makes getting fit more fun.

January isn’t the only time of year to reflect on your goals. Set a reminder in your phone or computer to evaluate your goals monthly so you can see how things are progressing. Alternately, you can hold a family meeting and discuss the household budget, spending, expenses and debt repayment as often as needed.

For more ideas about how to achieve your goals, take a look at Marie Engen’s blog post from Boomer and Echo.

Which habits will you change to allow you to reach your debt goals? Share your thoughts with us via Twitter, using the hashtags #DebtSolutions #ChangeYourMind #NewYearMotivation #NewYearsResolution

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