Releasing Debts Hold On Us
If we could bring back one thing from the ‘Good ole’ Days’ the area I would choose would be societies mindset around debt. It used to be reserved only for buying a home. Then it moved into finance options for college, for a new car or RV, and now you can finance your couch, phones and even dog. Not only are people strapped with all of these separate big purchase payments, they also have their credit cards on top of that for everything else in their life that they just couldn’t wait for, or didn’t plan for. The worst part is the mindset that has slowly been ingrained through advertising. No longer is the final price listed on an item, instead you see the “low” monthly payment.
Because we know we couldn’t get approved for this lump sum loan, at least we can throw another 5 monthly payments of $49.99 on our credit card. No sweat. But even with all of the red flags waving around those decisions that we continue to ignore, we forget one more tiny detail…interest. Yes that ridiculous high credit card rate of 24.98% or 29.8% rate that is blatantly printed on our statements. Because we are so accustomed to not being able to pay off our credit card in full every month, our once “good deal” of $49.99 for 5 months now is $65 or even $80 a month because of interest. If deep down we know this when considering our next out of reach purchase, why then do we continue this cycle? Is it because we like the whirlwind of constant catching up? Do we feel like this one decision today won’t make a dent in our terrible situation so what does it matter? Does keeping up with our friends, peers and strangers mean so much that we feel obligated to keep upgrading our lifestyle? It’s probably a mix of them all, plus many more.
Eventually it doesn’t matter what the reason is that got us to where we are. What matters is the reason we come up with that will get us out of it. It can be as simple as we want a less stressful life, or we want to get debt free, or we are working towards a bigger goal and our DBI (debt to income) ratio is just too high. Whatever the reason is, use it. Taking the first step always feels the hardest. The thing about tackling debt is it has to be approached from many sides at the same time if you want to see quicker results. Dragging it out as long as possible it’s like putting one finger into the icy lake at a time until it goes numb then you put in the next one. Jumping in fully to this new way of thinking, and living comes with many more pros than cons. The primary ones being you build up excitement at seeing quicker results and the power of momentum is like a tsunami ready to wash away the old ways and bring with it the new and improved healthy results.
A multi-side approach looks something like this. Cut off all of the unnecessary purchases (eating out, nail and hair appointments, movies, entertainment), cut out all of your monthly and yearly subscriptions, create a budget, downgrade your lifestyle (sell the boat, jet skis, RV, souped-up truck, entertainment center), get a part time job, buy everything you “need” used if possible.
Many people who are in debt, have many things in this list that they can start eliminating. For those who already went down that road long ago and are still on the getting out of debt journey, we have more mindset to work on. To think that we learn and apply something once or even for a while doesn’t mean that it has taken up permanence in our life. Spending habits have a way of sneaking up on us when it thinks we aren’t paying attention. As much as we need to relook at our definition of budgeted “needs” and see if any of them are really a “want” in disguise, we also need to relook at our vision. Why is this debt free goal so important? What will we do when we are debt free? What doors does this open up for us? Not only what can we start doing (enjoy the small pleasures of date night, eating out, etc.) but what can we stop doing (working overtime or dropping the second job.)
Eventually we all get to a point where it doesn’t matter how dolled up our debt looks in it’s fancy vacations, clothes, and newest gadget. It’s true ugly self is revealed, along with it the stress, arguments, and frustration that it brings. We deserve financial peace, we deserve to look around at everything we have and know that we owe no one nothing.
Fine tuning your vision with 1, 3, and 5 year goals will help get the creative juices flowing. It will make the never-ending drudgery turn into an exciting race with an end in sight. Deep down people know what they need to do to get out of debts tendrils. The hard part is stringing together the repetitive days with the steps needed to make that happen. Build up your committed muscle with reps of consistency and follow thru. Getting debt free is one of life’s greatest finish lines. The best part is when you reach this finish line, you’ll realize that the next greatest finish line ahead is having thousands saved and unlimited choices of what to do with it. So keep expanding your finish line with bigger and better goals. Start with getting out of this deep tunnel of debt and you will be amazed at how high of a financial mountain you can build after that.