6 Ways to Defeat Debt and Focus on Financial Growth
The giant sucking sound of debt.
You can't help it.
You wake up in the middle of the night thinking about it.
You feel as though one misstep or misfortune could ruin you…
- What if you lose your job, or become sick or injured?
- What if your partner or loved one needed you and you couldn't help them?
The feeling of dread and shame lingers in your mind, no matter what you do, and it is constantly on repeat.
This is what I call the GIANT SUCKING sound of debt.
No matter how hard you try to ignore debt, if you allow it to, it will chew you up and swallow you whole. It will follow you around for the rest of your life.
Is this resonating with you? Are you ready to step up and quit letting your debt define you? Perhaps you feel paralyzed in your tracks, and you aren't sure where to start?
Read on for six simple steps to make progress towards becoming debt free and eliminating the giant sucking sound once and for all.
1. Admit It
Be honest with yourself and stop pretending that you don't have a problem. You may think you are "living in the moment" by not addressing it. But ignoring it won't make it go away. Woman up! Man up! Person up! Admitting you have a problem is the first step to correcting it.
2. Add It Up
In order to not let you debt define you, you must get real with how big your debt is. Pull out all those bills and every credit card and loan statement you own. This will probably hurt a little. Figure out the current correct balance of every debt you owe. This includes the debt you may owe on your student loan, your car, your house...and; oh yes...the credit cards. How many of those do you have? Visualize your debt and be as brutally honest with yourself as possible. Once you know how big of a debt hole you are in, you can take steps to start filling it.
3. Share It
I don't mean blasting it all over social media or telling a gossipy friend or family member—I mean become accountable to yourself by sharing it with someone you trust. You may feel shame…and maybe sharing it will help you get honest with yourself and finally do something about it. If it's embarrassing to you, that is enough of a motivation to fix it. By sharing it with another, it becomes real. No more pretending it doesn't exist. Accountability is the key here.
4. Get Smart
Once you are aware of all the debts you owe, make an effort to understand the terms of the debt. Do you know how much interest the lender is charging you for each of these bills? Or the period that you have to pay it off in? A wonderful, humbling exercise is to add up all the interest you are paying in any given year for the privilege of owing your debt. This will most likely mentally rock you into considering a different path. Often, for the amount you pay in interest to your banker, you could easily pay for a relaxing, dream vacation, or maybe even a car. Adding up that interest will most likely be sticker shock, and will also shock you into action!
5. Give It an End Date
How long are you going to give yourself to stop this giant sucking sound? Look forward, measure it out and figure out a payment plan so you can pay off the principle and stop focusing on the minimum payments. The difference between dream and goals is a plan. Create a plan to get out of debt by mapping out exactly what you need to do, and start doing it!
6. Create a 24 Hour Rule
Don't backslide into old habits by compromising your integrity and getting pulled into impulse purchases. Next time you "have to have" that new black sweater, when you already have three at home, stop and pause. Make a new rule that you must wait 24 hours before making that purchase to decide. Spend that 24 hours on why you think this "black sweater" would really be the solution and the thing that you "need". It's time to get a back bone, not a black sweater.
No one likes to watch the same horror show over and over again, especially when the horror show is your life. If you start to feel discouraged and your personal debt seems insurmountable, think about how much pressure and insecurity will be off your shoulders when it is paid off. Growth is rarely comfortable and it is time for you to get uncomfortable for a short while. Suck it up buttercup, get real and start building some self-integrity so you can have a financial future you can be proud of.
Remember, you deserve to live your best life. You can have the life you have always dreamed of, with a little determination and honesty with yourself. You are worth it!
If you need any assistance with pursuing your ideal lifestyle with a financial plan, schedule a free call with us today.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.