Some of the most difficult challenges in life are financial. When we get into financial difficulties it can be very stressful and can prevent us from really relaxing and enjoying the sweet things in life as much as we should. Resolve now to apply all the lessons learned from financial errors to the creation of specific resolutions that will lead you out of the desert and into the Promised Land.



1. Resolve to stop buying things on credit. Buy nothing on credit in the future except a house when you have a significant down payment saved up. Postpone all other purchases until you can pay cash.

2. Resolve to cut up all your credit cards except one, and that one to be used only in emergencies. Credit card debt is enormously expensive and should be avoided completely.

3. Resolve to cut expenses in the home by $400 or more per month. See the Resources section for ways to do this.

4. Resolve to pay off your credit card debts one at a time. Pay down the one with the highest interest rate first by paying double or triple the minimum payment while paying the minimum on any others you may have. When that first one is paid off, start on the next highest interest rate debt and so on.

5. Resolve to get debt free within five years or sooner if feasible. Not counting your primary mortgage, list all your other debts in order of their balances. These include vehicle loans, home equity loans, installment loans, student loans, etc., that are separate from your credit card debt. (These all usually have much lower rates of interest than credit card debt, so continue to pay off the credit cards first.) When credit card debt is eliminated, or before if you can manage it, target the smallest balance loan and double or triple up on payments until it is paid off. Then work on the next smallest loan balance until the only debt remaining is your first mortgage.

6. Resolve to take on no new debt in the future (except for a first mortgage). Pin this to your refrigerator and mirrors: If I have to finance it I can't afford it.

7. Resolve to start paying yourself first by saving 10% to 15% of your income. That proportion is not available for spending under any circumstances. See this author's articles on saving and investing for examples.

8. Resolve to build up "rainy day" fund that will carry all your living expenses for six months should you lose your job or source of income.

9. Make all these resolutions into a new personal financial plan and adjust it to reality as the weeks and months go by. It will be motivating if you are able to keep it real.