Albert Einstein once said that the definition of insanity is doing the same thing over and over again and expecting different results. If Einstein was right, I hear from a lot of insane people. They are not willing to stop living on credit, but they believe that I magically can tell them how to get out of debt. Until they stop doing the same thing over and over again, they are not going to get different results.
That’s not the end of my mailbag, however. I hear from countless people who are willing to change the way they are managing their money. They’re seekers of financial sanity, and for them, I offer these simple yet powerful steps:
ä Change your mind about credit. Stop seeing it as the way out. You know that using credit causes debt, so stop doing it. Don’t allow credit to be an option as you manage the money you have and the obligations you have incurred. Instead, unload your obligations until you are able to pay for your lifestyle with less than the money you earn.
ä Give and save. No matter how pitiful your financial situation, you have to stop doing what you’ve been doing over and over again: spending all that you earn plus more, which you haven’t earned yet. Here are the two magic bullets that will change your life: giving and saving. Your goal is to give away 10 percent of your in-come and save another 10 percent for your future.
ä Create balance. Stop thinking about money and finances 24-7. You need to find time for faith and family, too. Nurture your faith by reading a psalm from the Bible every morning, and make prayer a part of your daily life. Spend more time with your kids and other family members. Nurturing other parts of your life will keep fi-nances from overtaking your mind to the point that you are obsessed by money.
ä Commit to cash. You can’t use credit if you don’t have credit available. Get the cards out of your wallet. Cash your next paycheck, and divvy it up in simple paper envelopes labeled according to your needs: rent, food, gas and so on. Place the amounts you’ll need for those items into the corresponding envelopes. Then spend from these envelopes instead of using checks or cards. When an envelope is empty, you’re done spending until the next fill-up.
The great thing about financial sanity is that it is a choice. You can keep doing things the way you always have done them before and keep your fingers crossed that you’ll get a different result, or you can choose to change your attitude by implementing new behavior.
Mary Hunt is founder of www.DebtProofLiving.com and author of 18 books, including her latest, “Can I Pay My Credit Card Bill With a Credit Card?” You may e-mail her at email@example.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, Calif. 90723.