In a previous post, I talked about one of two common questions I’ve been asked since becoming debt free: “What’s next?” This post is about the other common question I’ve heard quite a bit as well: “How did you do that?”
You’ve probably heard or said this question before. It happens a lot when someone loses a lot of weight. We all want to know the magic secret. “How did you lose 20 pounds? I have to know how you did that!”
We’re all looking for the secret to a higher level of success. While I don’t know if what we did is exactly secret (this is a public blog after all), if these words can encourage others to examine how they are doing things then I find it important to share.
- Have a plan. I stumbled for years before I found Dave Ramsey’s book “The Total Money Makeover” and decided the plan he outlined made sense. Maybe you don’t think Ramsey’s plan is right for you, and that’s OK. But don’t sit around without getting more knowledge about how you should move forward. Do some reading, investigate, watch some videos, whatever. Knowledge is power, and there’s no reason in a modern society to claim ignorance. Between your local library, videos, blogs, podcasts, and much more, cost shouldn’t be a factor either. There are lots of ways to increase your knowledge for free or cheap, if you’re willing to give up complacency and start searching.
- Go all in. We made huge strides when we decided to stop doing things at half effort. We looked for ways to cut expenses. We looked for deals. We increased income. And probably most importantly since I’m married, my wife and I got on the same page. We said no a lot. It was painful to turn down going out to eat, buying that extra self indulgence, or rewarding ourselves because we “deserve it.” Going all in requires a lot of intensity, but focused intensity is how you win.
- Have a monthly budget. I’m not sure if people are good or bad about this, but there’s no way I could live my life without a budget anymore. At one point in my life that wasn’t the case. I was so horrible. I spent money and kept checking my bank account to make sure I didn’t go over. That worked pretty well until it didn’t. I certainly didn’t have a plan to save or pay off any debt. I spent and spent and hoped everything would turn out OK. Now, we have a monthly budget (made in a spreadsheet) that allows us to tell our money how we’re going to spend it. We adjust as needed, but no more do we spend without a plan. There are many resources available to help you get started making a budget, so don’t make any excuses not to do it. Speaking of that …
- Stop making excuses. I was the king of making excuses. There was always some reason we weren’t making better progress. Only after I took a hard look at myself and my family’s situation, and was honest about why things were as they were that I came to realize we could do more. As a species, we are incredibly efficient at feeling sorry for ourselves. When you’ve finally reached you’re “I’ve had enough!” moment, you can reach into the pit of your stomach, purge the excuses, and get to doing the work of making a real change.
- Put off buying all that stuff you probably don’t need anyway. Do you really need a new car, or would a repair and contentment or a used car do fine for now? Are those name brand shoes a necessity, or can you get by with some “el cheapos” until later? Why are you still going out to eat for $10 to $15 a pop when you could easily bring a lunch for $2 a meal? If you delay your desires for a little while, then you can reap the rewards in the near future. The time goes by quicker than you might think. Resist the urge to indiscriminately spend now, and then go get yourself some nicer things later when you can use money instead of credit.
- Work hard, but also work smart. I was totally willing to work any kind of extra job to accelerate our debt payoff process, and had the support from my spouse to do it. I looked around and came across some side income that utilized the same skills from my profession, which happened to pay a lot better than being a janitor or a casino security guard (two jobs I seriously considered). The side job also allowed me to work from home, so I didn’t have to be away from my family for hours on end. Cutting costs will only take you so far, but bringing in additional income will catapult your efforts to the next level. It was hard work and stressful to keep things in balance at times, but it was so worth it.
- Ignore everybody. You might come have people in your life who won’t understand what you’re doing or why you’re doing it. From my experience, there are plenty of people who are willing to tell you how you’re doing it wrong and why your efforts aren’t that special. Ignore them; ignore everybody. The number of people I have found who are actively working to pay off debt and improve their financial future is very low. Fortunately, we were also surrounded by people who were encouraging us. But really, you have to ignore them, too. If you get too comfortable with your progress you may be tempted to back off your intensity. Don’t back off. Ignore the haters, say thank you to your supporters, and push really hard to the end.
- Have a big “why.” My family was a big motivator, for sure. I want to bring my children up with sound financial principles so they grow up and hopefully avoid some of the mistakes their mother and I have made. In addition, I was angry. Our student loan was our last debt, and I hate how the student loan system is set up. When students enter higher education, they are allowed to borrow huge sums of money. Regardless if you fall on financial hardship, like say the global economy almost collapsing, you’re indebted for life. Government-backed student loans are not bankrupt-able. I made that an excuse for a long time until I decided to funnel anger into energy for getting out of debt. We’re no longer a slave to that system of control, and I hope I can teach my children to stay free as well.
There is probably more to it, but that’s a lot of the main points. What’s keeping you from paying off your debt? If I can do this, then you can do this. It certainly won’t be easy, but I doubt you’ll regret it.
And as Ramsey says, “If you pay off your debt and hate it, you can always go get you some more.”