What is your attitude towards money?
There are five styles of dealing with money. Each has strengths and weaknesses. Find the balance.
SAVER: The saver
equates money with personal security.
STRENGTHS: Naturally frugal, easy to embrace simple lifestyle and make socially responsible purchases.
WEAKNESSES: Reluctant to spend or seek investment opportunities.
STEPS TOWARD BALANCE: Give more to causes you care about, buy or make something you (or a friend) have always wanted and have use for.
"Wealth consists not in having great possessions, but in having few wants." -- Epicurus
AVOIDER: The avoider is afraid
of dealing with money.
STRENGTHS: Knows how to live simply, resourceful at getting by without money, receptive to barter systems or fair-trade networks.
WEAKNESSES: Poor financial planner, bad at saving for the future, and may be unprepared for a financial crisis.
STEPS TOWARD BALANCE: Start small; pay the bills on time, or learn to balance the checkbook. If that is too daunting, write down the dates when you you write a check.
"The easiest way for your children to learn about money is for you not to have any." -- Katharine Whitehorn
OVERSPENDER: The overspender
equates money with success, or sees it as a tool for self-gratification.
STRENGTHS: Willing to take risks, invest in starting green businesses, or look for responsibly made quality products.
WEAKNESSES: Can be an impulsive spender, often lacks savings or investments.
STEPS TOWARD BALANCE: Create a budget that still allows spending but keeps track of what you do spend.
"I get so tired listening to one million dollrs here, one million dollars there. It's so petty." -- Imelda Marcoe
USER: The user sees money as
an expression of personal power.
STRENGTHS: Easier to identify how money can work for social good, understands the impact of available choices.
WEAKNESSES: Can forget how money affects others, and can be devastated by unforeseen loss of money.
STEPS TOWARD BALANCE: Develop a "time budget." Plan on doing things that don't cost money, such as spending time with friends.
"The value of a dollar is social, as it is created by society." -- Ralph Waldo Emerson
BALANCER: The balancer has
a balanced relationship with money.
STRENGTHS: Uses money as a tool, understands own money predisposition and knows how to save, invest and purchase responsibly.
WEAKNESSES: Few weaknesses, but life events can throw you out of balance -- keep exploring how to have a balanced perspective on money.
STEPS TOWARD BALANCE: Share your money habits with your children, and help them become wise and responsible consumers and investors.
"Money is a good servant but a bad master." -- H.G. Bohn
2. Create a budget
Try to lighten this budget so you are paying off as much debt as possible. Then stick to it -- it should be restrictive without being painful. If it is too tight and you can't follow it, give yourself a little more spending room.
3. Pay it off
Start with the card with the highest interest rate; or, if you need a psychological edge, start with the card with the smalles balance so you can sense some progress. Keep to your budget until your debt is gone. Any windfall money, such as a bonus, tax refund, or inheritance, should go toward debt reduction.
4. Pay cash
Whatever you do, don't use your credit card as long as you are in debt. Ever. If you can't resist the temptation of using your card, follow the advice of Bob Dreizler in Tending Your Money Garden -- put your card in a plastic container, fill it with water and freeze it. Then when you want to use it you will have to wait until it thaws, and by then the impulse may be gone. (Note: microwave ovens destroy credit cards.)
5. Start saving
When you get out of debt, take the same amount you have been paying to debt reduction and divert it to savings. You can even invest it is worthwhile, responsible companies or in community investment.
6. See a debt counselor
If your debts are too large to control, or you can't get the knack of living on a budget, call to speak to a debt counselorl There are two national nonprofit credit counseling organizations that can help:
Debt Counselors of America at (800)680-3328,
and the National Foundation for Consumer Credit at (800) 388-2227.
If you look for a local credit counseling bureau, find one that is nonprofit.