Being a slave to your debt means staying on the merry-go-round of the debt cycle. Never paying it off and carrying over balances month after month. Continuing to max out credit cards or using one credit card to pay off another. Buying a car or signing for a mortgage that you can’t afford. It means not changing a thing about the current state of your finances and still hoping they will magically change themselves.
I’m here to tell you that you can absolutely break free of the cycle. You can regain control of your finances – today, right now – by first making the choice to do so. Start small. Take your credit card with the least amount due and carve out a plan to pay it off. It may take a few sacrifices, but it will be worth it in the end. Figure out the things that aren’t all that important to you and devote that money to taking charge of your debt.
Relentlessly cut back on the things that you don’t want or like or need to have and use your whatever is left (after putting some on the credit card) to do something that is right for you. Invest or save it, or buy that pair of shoes you’ve been eyeing for months now. Whatever you choose, celebrate it. Know that you are both fixing your past and living in the right now all because you made the decision to take back control over your debt.
A Debt-Driven Society
We are inundated with advertisements from credit card issuers, banks, car dealers and on and on. Our media is saturated with messages that make us feel inferior, or somehow inadequate if we don’t own the latest gadget, a bigger house, a fancier car, nicer clothes, more bling, more toys and more payments (OK, so they don’t advertise that last one).
The only way to break yourself and your family free from the vicious cycle of debt is to finally scream ENOUGH! Enough of the marketing. Enough of the feelings of inadequacy. Enough of being compared to others. It is time to start living within our means, not the couple down the street with two sports cars, a boat, a bigger house and a condo on the beach.
I have nothing against those people, but I am not in competition with them either, because financially, we have little in common. We have more mouths to feed. We make different choices. We make less money because my wife stays home with our children. We forgo the trappings of today for the promise of financial independence in the future. And that is just fine with us. But it hasn’t always been.
It’s difficult to admit to yourself you’ve messed up. But this admission is very important, because continuing a lifestyle of financial denial only leads to a bigger hole to dig out of down the road. Like the saying goes, when you find yourself in a hole, stop digging.
- paying minimum payments on your credit cards.
- getting cash advances from ATM machines because having a wallet filled with cash makes you feel rich.
- shredding bills without even opening them because you’d rather stick your head in the sand than face reality.
- reaching for your card to finance “emergencies,” sales and groceries.
- opening credit card accounts for free t-shirts, or discount off petrol, or some silly rewards program that accumulates points so you can exchange them for more junk to put next to the junk you’ve already stuffed inside your home using credit cards.
- turning to debt to finance cars because you lack the discipline to save cash for a car, or the discipline to buy a less modern car. Cars do not define you.
- finding ways to boost your income. Over-time, part-time work, a side job, selling your unwanted junk all qualify as potential ways to get your income up. There is no shortcut to getting back to even.
- accepting responsibility for the actions that got you in debt. For years I blamed my employer, school, medical issues, lack of financial education growing up, etc. for my debt balance. How ridiculous. So many people have had it much worse and managed to live within their means. So could we.
- educating yourself about personal finance. Much of what I’ve learned along the way I learned from reading. I checked out books at the library. I read magazines about money. I even watched and listened to media geared towards personal finance (radio shows, television shows, etc.). Turn off the rugby game, or the IQ-draining sitcom, and pick up a book about personal finances, or budgeting, or investing, or mutual funds, or insurance, or maybe even a biography about someone whose financial situation you admire.
- thinking about ways to get money working for you, rather than the other way around. How much better would your financial life look without debt? Create a dream budget and replace your debt payments with contributions to savings accounts, college savings funds, and your retirement account. Replace interest payments with interest income. Figure out just how much being a slave to debt is really costing you.
- reducing your monthly expenses to free up income to put towards debt repayment. Cancel the DSTV. Stop eating out. Cut your own hair. Ride your bicycle to or from work. Get radical.
So, You Want to Be Free?
So if you really value freedom, you will join me in first ridding yourself of the bondage of debt. When you sign up for a loan, you are at the mercy of the bank and its well-crafted fine print filled with legalese and the many ways they can control you for the life of that loan. And if you don’t play by their rules, remember they have your credit held hostage, and they don’t mind reporting to the credit bureaus the first time you slip up.
The next time you have an emergency, you can still call the bank, but this time it will be to move a little money from your emergency fund to your transaction account to cover the plumber’s bill or the hospital. No longer will you be at the mercy of those holding the credit. Now, you are truly free.