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Mental Strategies To Beat Debt

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Mental Strategies to Beat Debt
Avoid Bankruptcy And Balance The Budget

Learn how to avoid temptation and overspending with the right frame of mind

Getting out of debt is a mental game as much as everything.
It takes perseverance, willpower and self-control to get out of debt,
especially if you entered debt due to overindulgence in shopping, gambling, partying, alcohol, drugs or etc.
That’s why we decided to give you some mental strategies to
help you avoid and reduce debt and bankruptcy.

Woman with out of control spending problems, needing a flexible budget

1. Commit To A Routine | Debt Psychology Sydney

Get in the routine of budgeting to avoid large debts

Budgeting is a debt reduction strategy that has been proven time and time again to work, to avoid bankruptcy, insolvency and the debt trap. In order to budget you need to think about your needs, your wants and your extra expenses and plan around them. Creating a flexible budget means that you will be able to follow it much easier than a stringent budget that doesn't allow for any rule bending.

Proper budget is a frame of mind in itself. It’s routine–a daily activity that for important reasons you seldom break. This takes determination and self-control, especially as the days go by. What often happens is that people start a budget with brimming enthusiasm to balance the budget and start a new lifestyle. But then as the initial energy subsides their old temptations come back and they blow the budget on expensive clothing, alcohol, luxury cars etc.

We all empathise with this scenario. It’s because it’s simply human nature for temptation to creep in. But this is no excuse for breaking the budget. Whether it feels good or natural to budget or not you need to do it for your finances. It doesn’t harm you and in fact it’s good for training self-control. The following points all relate in some way to ways to maintaining your resolve.

When you plan out a budget it is important to make it flexible. This means that you if you leave something off it or need to make an emergency purchase that you are less likely to completely throw away the budget. Too often, people fail in their budgeting as they are forced to pay for an expense that was unexpected. This could be anything from a medical bill to home repairs. These sorts of expenses can ruin your state of mind and leave your forgetting or cancelling your budgeting plans. That’s why you need to commit to your budget and turn budgeting into a routine that you stick to.

2. Break The Binge-pattern Of Spending | Financial Tips Melbourne

Don't let spending control you, learn to control your spending!

In the study of psychology there have been interesting findings into our spending habits and specifically, overindulgence. One of the main findings is at first alarming: that all habits that follow a binge pattern of overindulgence function in the same way as addiction in the mind. It’s not as alarming as you think at first because of the sheer number of these habits that we will all have throughout our lives. They’re not necessarily healthy however and it is when they start to break the bank that you have to correct them.

The thing about binge behaviours is that they are extremely well linked up in your brain. Every time you do them, they get more reinforced with new connections. So the time that you do them often becomes a routine–Friday night, when your stressed, before bed, etc. And it makes it hard to break the cycle.

But breaking the cycle is the key to breaking bad habits. Every time you repeat a behaviour those mental connections grow stronger, but every time you resist the behaviour they grow weaker.

If you had a strict routine there are ways to use schedules to break it entirely. For instance, if you used to go to the casino on Friday afternoons, schedule yourself in to dance classes on that very night of the week. Right on top of it, so you’ll be preoccupied during the worst of it.

To break the habit of overspending you might want to consider talking to a debt counsellor who can advise you on some practices that can help reduce your spending. Many people find it had to stick to a budget, which is why having a counsellor overlooking your financial decisions can be very helpful for sticking to a budget or stopping yourself from spending on credit.

3. Don’t Fall Back Into Bad Habits | Save Money Hobart

Don't let bad habits form when spending your money or buying on credit

Another key psychological finding in the burgeoning study of addiction is that a minor slip back into bad habits can precipitate a major binge because your brain tends to have an all-or-nothing attitude to self-control. When times are good and you’re resisting your spending habits that can cause bankruptcy, keeping it up is manageable. But if you tease yourself by indulging a little bit, your brain may give up, and the draw of temptation can become amplified immensely.

In the worst case scenario, you can undo all your good financial and psychological progress by slipping back into your old spending habits.

4. Use A Day Counter | End Credit Card Debt Adelaide

Get into the habit and make saving a daily goal rather than a long term on

The mentality to have about breaking a budget is that it removes all the progress you’ve made so far. Financially, it may not, it only sets you back by the amount you spent, but psychological, it risks going back to square one as you saw in the previous point.

That’s why we recommend a day counter, like a Chrome browser extension to track how many days of progress in fighting debt you have made. If you break your habit, you have to unfortunately go back to zero days. So this counter encourages you to not break it! There’s nothing better than the satisfaction of looking at a multi-digit day counter number that gets bigger every day and feeling the draw of temptation lift off your shoulders slowly.

5. Don’t Listen To Your Own Excuses | Financial Stability Perth

Be mindful of your excuses and attempt to overcome them as best you can

Fighting debt can be difficult and not remotely related to what you'd rather be doing. Your brain will get tired of it; it will start craving instant gratification at all costs. But you’re able to resist craving, you’ve been doing it the entire time. So you brain will start to make excuses to try to cajole you into spending money:

  • You deserve it. As a reward for saving for so long.
  • Just breaking the budget this once is a relief that gives you more motivation to save in the future.
  • It will only set me back a week, that’s not so bad.
  • And so on.

DONT LISTEN TO THESE EXCUSES! They can land you back in the binge spiral of overspending on shopping, gambling, partying, alcohol, drugs or etc.

Hopefully this article saves a few peoples bank accounts from bankruptcy, insolvency and the debt trap. If you read this article with a sombre attitude, that’s ok. Reducing debt isn’t meant to be fun, but it is meant to build self-control, self-motivation and willpower. These are invaluable traits that will stay with you long after your bank account is balanced. We wish you all the best with your budgeting and saving.

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