How to get out of debt
Many books have been written about how to get out of debt. Advice is plentiful, but sometimes we need more than a few tips about getting out of debt to motivate us to succeed.
I recently spoke with someone who asked how much money per month they should allow themselves to spend on entertainment. “That depends on how desperately you want to get out of debt,” I replied. I could see in his eyes that he had grasped the concept. Everything hinges on one’s passion for freedom.
There are those who would like to be out of debt, and then there are those who are willing to DO SOMETHING DRASTIC to get out of debt. Of course, we have to be reasonable in our pursuit to break the chains, but that doesn’t mean we should be lackadaisical.
Allow me to give you an example. For the past few months, my wife and I made the difficult decision to temporarily eliminate all discretionary spending. Rather than buy those iced white chocolate mochas or go out to a movie on a Friday night, we decided to kick Sally Mae to the curb. This level of short-term sacrifice is sometimes needed to achieve a goal.
What are some practical tips for getting out of debt?
Destroying any bad financial habits you may have is the first step to obliterate debt. If you’re spending like there’s no tomorrow, getting out of debt becomes a distant dream. You have to eliminate the possibility for failure and get people on your side. Stop overspending! Think intentionally about each purchase before you make it.
Next, you’re going to have to learn some tactics to improve your income. The more money you make above and beyond what it takes to cover your expenses, the better. Take up extra jobs, learn something new, and develop hope to push you to success. You can do it!
Finally, you’ll have to find some ways to de-clutter your financial life. Simplify everything, make it seamless, and design your lifestyle to automatically chip away at your debt. With all the extra money you’ll have by cutting back on expenses and raising your income, you’ll be out of the hole faster than you may think.
Dave Ramsey often speaks about the concept of focused intensity (he calls it Gazelle Intensity). The idea is that you focus on one step at a time and put as much energy as possible in accomplishing your goal.
Too many people try to juggle all of life’s responsibilities at once. Multitasking is a skill that comes in handy at times, but when it comes to getting out of debt, I’m convinced that focused intensity produces better results in the long run. This doesn’t mean you allow your family to starve while you hurl all your dollars and cents at debt. But what it might mean is you put off investing for a SHORT PERIOD OF TIME so that you can be free from the lender.
All the advice in the world won’t change a thing until YOU DECIDE you are ready to get out of debt. If you’re ready and you’ve hit the “I’ve-Had-It” point, it’s time to jump into action.
What you need is determination. Winning is not so much about getting the better interest rate or finding the better investment. It is about behavior modification. Change your behavior, focus on the goal at hand, and you’ll be out of debt faster than you can imagine!
It’ll all be worth it!
All of your sacrifice will pay off. By destroying your debts, you’ll find that you have much more money left at the end of the month to save, invest, and give.
By wiping your debt off the face of the planet, you’ll soon experience less stress and better concentration on the things in life that matter most. You’ll have more time to spend with family and friends, more money to support the ones you love, and an exhilaration of accomplishment like you’ve never felt before.
It’s worth it. Are you ready to take the plunge into financial freedom?
“Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.” -Romans 13:8 NIV
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