A 12-step program to lose the debt and create a lean, mean financial machine

Get Financially Fit This Year

by Shaunna Privratsky

We all strive to be healthier in our everyday life, so why not take that concept a step further? If your finances are badly out of shape and in need of a makeover, use this twelve-step program to lose the debt and create a lean, mean financial machine.

Lose the Weight

The first thing you can do is shed unwanted baggage. Cut out any overspending. A good way to get a handle on your spending is to write down every purchase for at least a month. Account for every cent. A pattern will emerge and you should be able to spot areas to forgo or at least cut back on.

Related: 10 Ways to Prevent Non-Essential Spending

Pay off debt to lose financial flab fast. Sit down with all your bills and loans and list the amounts you owe. Stop charging now. You can start with the biggest amount or the smallest. Just commit to paying it off as fast as possible. Once you get one balance paid off, start to work on the next amount in line, adding the previous payment to that. Soon, this snowball effect will wipe out your debt.

Use these guidelines to choose the best plan to pay off your credit card balances.

Spend less than you make to even up the scales in your favor. If you can't afford something now, save up until you can or find something comparable you may already own. When you give yourself the edge of a cushion of cash, your financial journey is smoother.

Develop Your Core

Now that your debt is getting under control, you've curbed unnecessary spending and you are spending less than you make, you can move on to the next area. Set some goals with your money. Identify what you need and what you want. Once you establish the difference between needs and wants, you will never put yourself in debt again.

Related: How to Set and Keep Monetary Goals

Pay yourself first. Start an emergency fund, if you don't have one already. Set aside a certain amount every month, before you pay the bills. You can even have a percentage taken out of your paycheck and automatically deposited into a savings account. You will probably not miss it, but the money will be there if you need it.

Start your emergency fund today. Here are 11 easy ways to find $1000 for an emergency fund.

Make sure you are covered. Get the proper coverage for your home, autos, health and even life. We all hope that nothing bad will happen to us, but if we prepare for the worst, we will be protected in case it does.

Build Some Muscle

Save for your retirement. It's never too late to start, but the earlier the better, thanks to compound interest. You can save triple if you start saving regularly in your twenties, rather than in your forties. Imagine retiring a millionaire!

Work on your credit score. This is a three-digit number assigned to your financial health. It is used increasingly to determine how credit worthy you are, and can affect the mortgage you qualify for, the job you land, and the car you can drive. The fastest and easiest way to boost your score is to pay every bill on time. Do this for six months and your score will be pumped.

Use debt to your advantage. Hey, you just got your debt paid off! There is such a thing as good debt, like buying a home. When you responsibly sign a mortgage and make timely payments, you are showing you are able to handle credit wisely. You can also deduct your mortgage insurance, and possibly other expenses, on your taxes. The equity you build in your home improves your credit score and builds those financial muscles.


To maintain your financial health, keep on the healthy track. Continue saving, both in your retirement fund and your emergency fund. You may also want to save for college for your kids, or build other savings accounts for special goals, like a dream vacation or a second home. As your savings grow, your sense of well-being and peace of mind grows as well.

Look out for scams that will try to trip you up. Get rich quick schemes can part you from your hard-earned cash faster than flushing money down the drain. Identity thieves may try to benefit from your high credit score or get a hold of your account information. You may be phished on your computer, where a false company sends you a legitimate looking e-mail. You click on it, and it asks for personal information in order to scam you. Watch out for these tricks and safeguard yourself.

Keep your financial plans up to date. Make sure you are on track with your retirement savings and that you are moving along with your goals. It may be worth it to hire a trusted financial advisor to guide you on your financial journey.

It takes some effort to become financially fit, but it is worth it. When your finances are healthy, your life runs smoother. By taking charge and following these twelve steps, you can be the picture of fiscal health next year.

Reviewed December 2017

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Shaunna Privratsky became an expert in personal finance out of necessity. Between writing, reading and gardening, she is always on the lookout for bargains. Please sign up for the free newsletters at The Discount Diva. You can also visit Shaunna on Google+.

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