Feels like you’re stuck in a never-ending spiral of debts? While there’s a good case for borrowing money, there are also cases where it could spell trouble. Bad debt is a big trouble for everyone involved, well except the bank. And getting out of the debt pit could be frustrating and mentally degrading. Here are some tips to help you shift your thinking and gear up to building wealth for yourself.

1. Look Back A Month

In order to dig yourself out of the debt pit, you have to start with an honest assessment of what you’re doing with your money. Have a look at your credit card and account statements for the last month and take note of every transaction you regret or don’t remember. Go through it again and take note of every item you can do without for the next month.

2. Learn The Art Of Delayed Gratification

Learn to distinguish between your “needs” and “wants.” Take care of the things that you need while saving up for what you want. Start by setting a small goal and work out how much you want to spend as well as what your savings timeframe is. At the end of your savings period, get that item you’ve been saving for and enjoy the process. Enjoy the time spent looking for the perfect item and think about the fact that you’ve saved up for it. You’ll find a sense of fulfilment and will be far more considerate about your spending habits.

3. Create A Budget

You may have probably read this a thousand times but it’s everywhere for a good reason. If you want any chance at building wealth as well as saving and reducing debt, then you ultimately need to know where your money is coming and going. Track your spending by writing down what you get paid every paycheque (plus other source of income) and jotting down all your expenses up to the last cent. Subtract all your expenses from your income to work out what is left over. This difference is what you can start using to save or to pay off your debt.

4. Stop Spending And Smash That Debt

Review your budget and cut out anything that you can do without and apply that surplus money directly to your credit. If you may, cut out the card too, so you won’t have any way to keep spending on it. If you have multiple cards, then work out which one has the highest rate of interest and apply the bulk of your surplus to that card while making only the minimum repayments for your other cards. Once the first card is paid off, you can then apply the same repayment strategy to the one with the next highest interest rate, and so on and so forth. You may also want to consider a low interest or no interest balance transfers to get your cards paid off faster.