Get Out of Debt By Turning it on it's Head - Part One There is an ever increasing reliance on the use of credit to fund the lifestyle demands of the 21st Century consumer. With that demand however is coming an additional problem. Over indebtedness. Credit appeals to so many. Take it away now and pay for it later. Psychologically that use of later almost conjures up images of something for free that you never pay for. In truth what it means for so many is that you never actually finish paying for it.

The problem appears to be spiralling out of control with people looking to secure more debt to pay off the demands of the existing debt. This causes a downward spiral of ever increasing misery as the debt gets to a totally unmanageable point. People in debt begin to become more desperate seeking an alternative way out of that debt.

If this is you, read on because it may be what you’re doing is simply adding to your problem. In addition, I may have something that could help you out of that misery.

Old Thinking – The Problem

Visit any newsgroup or forum were debt is mentioned and it’s littered with stories of misery, desperation and the inevitable what do I do. The most popular answer is to cut back and in many respects this is true. It is however a massive change for people and families that have historically try to spend their way out the misery their situation has brought them.

Although it is true it is only part of the answer. Looking at your financial picture is a great start and people should look at ways to cut back, but getting out of debt requires something else, which is so often overlooked. That something else is changing the way you look at debt.

Think about it? Regardless of the “reasons” people give for debt, 95% of people are in debt because they wanted more things than they could afford to pay for from their existing funds. They needed more money, typically loaned to them by the bank. How odd therefore is to expect those same people to all of a sudden live their life on less money than they receive each month and to do that for years while they pay off the debt.

Very simply, this can’t be achieved. Why? Because the interest payments stretch people way beyond their original problem and in addition it leaves them with no capacity to find money for sudden emergencies. Lack of financial resources is what gets people into debt, so saying how can I get out of debt on my existing finances is a waste of time, when it’s those existing finances that got you into debt in the first place.

Also, this is not the way rich people look at money and have it working for them. They take a different approach. Clearly their approach works, because they’re rich. So how do they do it.

Change Your Mindset – Solve the Problem

What’s the answer? Turn the debt on its head. How? Play with the numbers. Look at what it will take to get rid of the debt. Take your debt and look at the total size of it. Once you’ve got that number you’re in a much stronger position. You’ve got the first part of your goal and with that the first step of your way out of debt taken.

What you now have to do is set a plan to get that much more money in. You have to attack that debt with more money than you currently have. You turn the debt on its head, not by thinking “oh no I can’t afford it, I’ll always be in debt” but by thinking

“How can I make this money” your mindset has immediately changed. You’re looking at the problem much more aggressively rather than passively accepting a seemingly endless problem.

What’s being suggested here is not rocket science. This new way of thinking is something that so many will already be doing. Here’s an example. You decide you need a car. The price of the car is on the sticker. After a bit of bartering you reach a final price. You know how much money you need. You work out a way to get that money. You probably get it on credit but you get the money together and not from the money you currently have. Now, simply change the car for the total debt you calculated earlier and take the same plan.

It’s a very simple example but I wanted to show you that you have the ability to think about this is the right way. This is the way rich people look at getting money working for them, not against them

In Part Two I’ll show you actions that could not only get you out of debt, but put you on a totally different financial path in life.

Andrew Leatherland is the owner of Ordinary Joe, which works to help everyday people work to improve their financial situation by taking charge of their money. The website can be found at http://www.freewebs.com/ordinaryjoe. Andrew also blogs about the subject at http://the-ordinary-joe.blogspot.com.