The most popular New Year’s resolutions are to lose weight, stop smoking, and get out of debt. While we can’t address all of these in one article, we can explore how to organize your finances, the first step to getting out of debt. Counterintuitively, one way to address this issue is to consider a secured loan; however, many people do not know how to compare secured loans.

What Caused the Debt?

You cannot fix something if you don’t understand how it became broken. Therefore, the first step on the road to recovery is tracking your behaviour to discover what caused the debt in the first place.

• Do you frequently make impulse purchases?
• Do you hate sacrifice?
• Do you reach for the credit card before considering cash?
• Do you feel the need to keep up appearances?
• Do you enjoy expensive toys, such as luxury automobiles?
• Do you simply love new things?

You may find yourself in any of these categories, but to truly unearth the reasons behind your circumstances, you need to track your spending. You can do this by reviewing past months’ credit card bills. You can evaluate what types of loans you have taken out. You can even spend a month entering every expenditure on a spread sheet.

Whatever you do, you have to face the issues that have caused the problem and give each one a name. For example, if I buy too many clothes, I am a clothes horse. Once you give the problem a name, you can commit to change.

What Behaviours Should Cease?

First of all, you should immediately stop spending more money than you make. Here are some behaviours you can avoid that will help you meet that goal.

• Stop window shopping. While you are at it, stop going into stores when you don’t need anything.
• Stop eating out.
• Stop carrying your credit card in your wallet.
• Eliminate things that are not necessary. For example, do you really need satellite radio? Can you bring your lunch to work and avoid the cafeteria?
• Immediately, throw away junk mail advertisements.
• Stop driving the latest automobile.

What Behaviours Should Increase?

One of the keys to success is positive thinking. Here are some positive ways to tackle the debt issue.

• Plan for expenses.
• Learn how to cook great meals.
• Contribute to your 401K account.
• Creatively find ways to have free fun.
• Get a library card.
• Read personal finance blogs, books, and newspaper articles.
• Scour grocery store advertisements and plan meals according to the sales.
• Make more money. A part time job can help you chip away at debt.

How Can a Secured Loan Help?

Making the minimum payment on several credit cards will never get their balances to zero. Taking out a secured loan and paying off your cards is one means of eliminating the burden of debilitating interest payments.

Remember that secured loans are secured by your home, car, or other valuable possession. Therefore, you must make the monthly payment without fail. You cannot use a secured loan to organize your finances if you do not first make a clear budget and stick to it. In addition, you must immediately stop using credit cards. Otherwise, your secured loan will only exacerbate the problem.

How to Compare Secured Loans

Secured loans have many variables. You must compare the interest rates, the loan periods, and the payments. It is also a good idea to compare the reputations of different secured loan companies and choose one that is easy to work with.

Naturally, you want a low interest rate. However, almost any secured loan interest rate will be less than the ones on your credit cards. A very important consideration is the loan’s period. A 60-month loan will cost you far more in interest than a 12-month loan, for example. On the contrary, a 60-month loan will have lower payments, and that may be what your budget needs right now.

Choosing the right secured loan is very important since its security is based on your valuable property. Make sure this is one loan that you will never default on, and you will be on track to have a new year with organized finances. The future looks bright. Now, about losing weight and putting down cigarettes, perhaps you should take on those issues next year.