Be debt-free in 2016

If taking control of your money is one of your goals this year, you need to come up with a plan that’ll outlast your Valentine’s Day roses, says financial expert Dave Ramsey.  To make that happen, he says, you must begin with a plan to pay off your debts, beginning with the smallest one. This frees up more of your money to pay off even more debts, and you create a snowball effect. This changes you from being a person who buys what they can’t afford into a person who can afford to buy what they really want, in cash.

  1. Where do I want to be financially at this time next year?

Take a look into the future. Imagine yourself better off, money-wise, by 2017. What does that look like for you? Depending on where you are now and just how gazelle intense you want to get, you might have made a dent in your consumer debt, or you might be coasting through a fully funded retirement plan and gearing up to finally pay off your house. You’ll set yourself up for success by having a solid, definable goal in mind with a timeline in place to reach it.

Use an outline to help you break down your goals into tiny, bite-size pieces. Now pull out your calendar and start writing down your goals!

  1. How can I kick-start dumping debt for good?

The key to freeing yourself from debt is making a budget and sticking to it so you can see where your money is going. Try it out for about three months to get the hang of it and to see some patterns in your spending. Once you do, it’s pretty simple, and it can actually be fun! This is a habit worth starting.

Once you have a budget, you have to change your perspective. You have to hate being in debt. That’ll make you pay your bills off fast. That also means you might have to delay some things you really, really want. But if you slog through the painful stuff now, you’ll reap the rewards later.

  1. What are my biggest financial obstacles?

Change isn’t easy. If it were, everyone would be debt-free. That’s why you need to identify what’s held you back in the past and attack those obstacles head on. Do you spend money you don’t have? Is your accountability partner MIA? Does an endless stream of emergencies drag you back into debt as soon as you’ve gotten out?

Identify your weaknesses or stumbling blocks so you can protect yourself from them when you’re feeling tempted or backed into a corner. Where are you spending your time? Are your priorities lining up with your goals?

So, now that you’ve faced the hard questions, are you ready to make 2016 your best year yet? With the right level of determination and a little bit of planning, you can be debt-free.

For more ideas on how to get control of your finances, visit DaveRamsey.com.