How to get out of debt - focus on the small things

When you owe a lot or you have a goal to purchase something big, it might seem overwhelming. But small amounts accumulate in to big amounts over time. So think about the little purchases and bad habits that you have and calculate what it amounts over time. Here is a table showing how the little becomes big over time.

A day	Week	Month	6 months	Year	5 years	10 years	20 years
0,1	0,7	3	18	36,5	182,5	365	730
0,5	3,5	15	90	182,5	912,5	1825	3650
1	7	30	180	365	1825	3650	7300
2	14	60	360	730	3650	7300	14600
3	21	90	540	1095	5475	10950	21900
4	28	120	720	1460	7300	14600	29200
5	35	150	900	1825	9125	18250	36500
10	70	300	1800	3650	18250	36500	73000
20	140	600	3600	7300	36500	73000	146000

This is also useful if you are thinking about getting extra income. It doesn't necessarily need to be a lot you're making if you are using it all for your debt payments or savings, or furthermore investing if you have no debt.

You can also calculate it another way. Let's say you're looking to save a 1000. How much would you need to save per day to accumulate the amount in a week, a month, several months or a year.

A day	A week	A month	2 months	3 months	4 months	5 months	6 months	9 months	A year (360 d)
1000	142,86	33,33	16,66	11,11	8,33	6,66	5,55	3,7	2,77

These calculations are made on the assumption there's no interest on the savings (or debt).

Getting out of debt – living on other people's money

As long as you have any debt, you're actually living on someone else's money. If you owe any money to someone else or if there's debt on your credit card then every cent you use is actually their money, not yours.

This is a good way to realize what it actually means when you have debt. This is also a good thing to consider every time you're about to purchase something. Would you use your credit card to buy a cup of coffee or a candy bar? I wouldn't. But when you have debt, it doesn't make difference if you use cash, you're actually buying on credit.

Another thing is to consider the real price for your purchases when using credit or paying in installments, but I will get back to this later.

Who's home do you live in?

It doesn't matter if you own your home or if your renting, but who's home is it? If you look around, what do you see? We get used to seeing our home every day and we don't see it the same way a stranger would, so here's something to try. Get a mirror, preferably larger than a pocket mirror but small enough for you to carry with you. Now take a look at your place through the mirror. What do you see?
Does your home reflect who you are? Does it reflect who you used to be or who you want to be?
If you see things that you never use, get rid of them. If you see things that are broken, get rid of them. If you see things that are ugly and cheap, hide them (or get rid of them).
I am not selling you feng shui, but make sure you home is making you feel not only safe and relaxed but also confident about yourself and your goals, what ever your goals are.
Now, don't go spending money on latest trends or new appliances, but instead make the most of what you already have. Get rid of stuff that is holding you back or reminding you from the times when you had even less money that now. Sell the stuff for some cash or if you still need them, keep them hidden. Don't forget to dust, wash and polish. Anything looks better sparkling, shiny and clean.
Isn't it easier to believe to be succesfull when you're reminded of your achievements instead of been stuck with memories of your hard times?
If you need to buy something for your home, go for the quality if you can afford it. If you can't without been set back with your goals, then don't. And never ever take your credit card to IKEA with you..

Stop making more debt

Well, that's it, right? Stop making more debt. Done. Let's go to the next step.
No.
If you're a woman you propably have been on a diet at some point. Remember how you promised to start eating healthy and never eat junk food again. Sounds so easy, but it's not.
I've seen Suze Orman on Oprah a couple of times and she has given some good advise on how to get out of debt. Suze's advises are for people living in US and since I live in Europe not all her advices are directly applicable. However, I agree mostly with her advises on how to manage (credit card) debt.
I have two credit cards at the moment and what I am going to do is to cancel the other one, so I can't make more debt on it. Suze warns you not cancel cards so that your credit score (called FICO score in the USA) doesn't go down. However in my case I am not in need of any bank loan now and the bank can not change my mortgage terms on their own, so I have nothing to lose there at the moment. The other credit card I will still need to have because I have no emergency funds what so ever.. But I have taken this card out of wallet and sealed it in an envelope so that I am not to use it unless there actually is an emergency. I have also deleted my credit card information from all the online shops I have been using.
Now, I will pay minimum on the cancelled card and as much as I can for the active card. In addition of paying the minimum on the credit card bill, I will make another payment on my payday, paying everything I have left from the previous salary.
Does this make sense to you? Please leave a comment.