The Psychological Battle With Debt
Never Give Up
Last week I wrote about a couple whose entire lives were ruined by debt. It was a story about bad choices and bad luck. It could easily be the story of many peoples life. What made it a sad story is that they seemed to have given up. They did not believe that they could ever get out of debt.
Failure is never permanent, until you’ve given up.
If you’re going to beat debt or any other problem in your life, you have to win the battle in your mind. I know the toll that debt can have on your mind. I know what it feels like to walk around with $50,000 in student loan debt. That desperate feeling when your $350 short and the minimum payment is due next week.
When it feels like every penny you make goes to cover the interest payments and the bills are stacking up. You feel like you’ll never get out of this hole and all you want to do is give up.
Don’t ever give up.
Debt Can Make You Tired
I don’t mean “sleepy tired” that you feel before bed. Debt or more specifically the anxiety that debt introduces to your life can bring an ever-present feeling of exhaustion.
- You wake up, tired
- You eat your breakfast, tried
- You drive to work, tired
- Talk to your boss, tired
- Smiling at your friends and family, tired
- And go back to bed, tired
All the while, nobody has any idea that you are tired. Debt can make you feel like you’re walking around in lead shoes with a boulder on your back. But you don’t tell anyone how tired you’re feeling because you feel ashamed that you got into this situation.
The most insidious aspect of debt and anxiety is how it uses shame to isolate you from the people your closest with. If you want punch debt in the mouth, sit down with someone you care about and talk them about your debt and how it’s impacting you.
You are not the only one going through what you’re going through. If other people can climb out of their hole, so can you.
You Have To Be Tough
If you’re going to climb out of debt you have to be tough
Here’s my definition of tough: Doing whatever it takes to get what you want, no matter how unpleasant.
- You have to be tough to work your side-hustle when all your friends are out partying
- You have to be tough to work all day and go to school at night
- You have to be tough to work three part-time jobs just to pay the bills
- You have to be tough to keep moving forward after the bank has foreclosed on the house your children grew up in.
- You have to be tough to start over in your 40’s or your 50’s or your 70’s
You ARE Tough
The first thing you need to do is forgive yourself for all of the stupid decisions you might have made up until this point and commit to not repeating those decisions. As Les Brown would say “if you wouldn’t do it today, you’re convicting an innocent person”.
The next thing you need to do is block out any external or internal voices telling you that you can’t do it. You Can do it. It’s going to be a hard long road but you can do it.
Get the right people in your corner. Find a confidant that you can talk about money and spending with. When you are ready, find a financial professional who will help you with all of the technical aspects of a financial game plan.
Once you are mentally prepared to fight against your debt and you have the right people in your corner, you can begin focusing on actionable steps you can take to pay off your debt.
Practical Steps To Eliminating Your Debt Once And For All
Before you begin throwing every penny you have against your debt you’ll want to have an emergency fund in place. I know from experience once you are determined to tackle your debt it can seem like a waste of time to park any amount of cash in an emergency fund, but it is not a waste of time.
If you want to ensure you get out of debt and stay out of debt, you’re going to need access to liquid cash. There WILL be unexpected financial expenses on your debt repayment journey. It could be an unexpected medical bill, a leaky roof, or your car dying on you. I don’t know what it will be, but there will be unexpected bills along the way.
What happens when one of these unexpected bills falls in your lap and you have no emergency fund? Where will you find the money? You will end up borrowing it again. That kind of setback can be a blow mentally, so do yourself a huge favor and set up an emergency fund to handle the financial curve balls life WILL throw at you.
Teach yourself about the math behind financial independence. The name of the game is how much you save. If possible, try and increase your income and look for ways to cut down your expenses.
Ideas For Increasing Your Income
- Consider asking for a raise at work
- Look for oppurtunities for a promotion at work
- Begin looking for oppurtunities at other companies that provide you with an opportunity to earn more money
- Start a side hustle
- Become a “10% Entrepreneur”
Cutting Your Expenses
The one thing you can start doing this very second is managing your expenses better. Start tracking your money, you should know where every penny you make is spent. Once you have a good handle on where your money is going it’s time to create a budget. Your budget should reflect what you value.
If you say you value getting out of debt but you have only budgeted enough for the minimum debt payments, you need to start from scratch. If you are really serious about paying off your debt here are some items that you’ll want to consider reducing or eliminating from your budget altogether.
- Your daily coffee run
- Buying Food anywhere but a grocery store
- Your car. Unless you absolutely need a car, consider trading it in for a transit pass.
- The cable bill
- Your cell phone plan. At the very least shop around for the best rate.
- Your housing costs. Obviously, you need somewhere to live but consider ways to minimize this expense. If you own your home consider some form of house hack. If you rent, consider moving to an apartment with more roommates to share the cost. If you are willing to sacrifice your living standards you can potentially get out of debt years sooner and move on with your life.
This article is for informational purposes only, it should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.