Welcome back to our short 4-part series on How and Why You Should Get out of Debt. If you haven’t read the intro to this segment, start by clicking here.
Sometimes, being so immersed in the PF blogging world, I forget that there are still thousands of family out there who haven’t taken that first step onto the road to debt free. These are the families I’m speaking to, generally, today.
Let me first start by saying that you deserve better. You deserve to be out from under the horrible stress and anxiety that comes from living with a massive amount of debt, consumer or other debt. However, there are certain things that must happen if you are going to succeed on your “getting out of debt” journey:
You Have to Have Reached Rock Bottom
If you’re going to succeed at becoming debt free, you have to be sick and tired of being sick and tired. You have to be at the place where being in debt is more painful to you than the journey to get out of debt will be. You have to be at the “I can’t take this anymore” place. You have to be at that place where walking over a bed of hot, burning coals sounds more bearable to you than swimming in a volcano, know what I mean? The road to debt free is a tough one, but it’s not as tough as the day-to-day smothering of a mountain of debt. If you’re not there yet, go ahead and do some visuals to see if you can get there.
Visualize your life if your were laid off tomorrow and couldn’t find another job right away.
Visualize spending the next 30 years continuing to live paycheck-to-paycheck with the stress of being in debt.
And visualize the peace and joy you would have if someone came along today with a check that would wipe your debt slate clean.
Keep visualizing what you need to see in order for you to get yourself to rock bottom, to that place where your desire to get out of debt trumps your unwillingness to make the sacrifices necessary to get to debt free. If you can’t do it, you’re not ready.
Recommended Reading: Life After Debt: Practical Solutions To Get Out of Debt, Build Wealth, And Radically Transform Your Finances Forever!
Commitment to Analyzing Present Habits Must Follow
If you aren’t willing to face the leaks in your financial ship, your spending habits are not likely to change. Spend tracking is a must, for a minimum of 30 days, to see where your money has been going and what led you to get into debt in the first place. Create a spreadsheet or find an online plan like Mint, and start figuring out where you’ve been spending your money.
Another part of analyzing your present habits means working to uncover the psychological reasons you’ve been spending beyond your means. We call this “deep sleep debting”. Check out our story of deep sleep debting here. If you can get to the root of why you’re consistently spending above your means, you can begin the process of healing from this destructive habit. And with that healing comes an easier path to following the next step of your debt freedom plan.
You Have to Create a Doable Plan
This means setting specific (i.e. S.M.A.R.T.) goals for your money. Once you’ve analyzed where your money has been going, it’s crucial to make the commitment that your spending going forward is going to match your and/or your family’s values and goals. This may or may not mean a budget for your family, but it does mean that, when considering a purchase – any purchase – it’s important to analyze whether or not that purchase fits within the goals you’ve set for your finances. In other words, a plan has to be put in place as to how you are (and are not) going to spend your money. But in order to do that, you first need to set goals: attainable, realistic goals. SMART goals (specific, measurable, attainable, relevant, time-bound).
My fave “get out of debt with a plan” book: The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness
An attainable goal isn’t “Get out of debt”. An attainable goal, one that has the highest likelihood of being achieved, says “Within the next six months I am going to pay off $5,000 of credit card debt, and I am going to do that by cutting unnecessary spending by $800 a month”. Remember that a goal with the highest likelihood of attainability is one that is set based on a specific plan. This means that if your goal is to pay off $5,000 in credit card debt within six months, you must have an achievable road map as to how you’re going to get there, based on your new income and spending plan.
That’s all, folks, for today. Join us next time for Part 2, Getting Through the Rough Spots.
Got a “get out of debt” story? We’d love to feature your story on The Frugal Farmer. If you’re interested, just click on our Contact Us page and let us know.
Love the no-nonsense approach, Laurie! And can’t wait for part 2. =)
Thanks, Mrs. PoP. Glad you enjoyed it! 🙂
Agree with Mrs. Pop. There’s no sugar-coating it, you just have to get out and do it. I love the SMART goal approach, and would add that being accountable to someone for those goals can also be a huge help.
Totally agree, Matt. The accountability part is huge. Having people to report to, so to speak, is great for keeping a person on track.
Loved the post.
I have noticed that many people run from the fact that they’ve hit debt rock-bottom. They still wallow in ideas that give them hopes that debt will just magically disappear. Many keep living like they are used to even with $100K debt, while in fact they have to buckle up and start repaying loans NOW. Sad but true.
Wow, that is scary! Then again, we were there once. I think the hardest part is probably facing the mountain, you know? I remember feeling just sick when we finally sat down and crunched the numbers. I wanted it to not be true – oh, how desperately I wanted to wake up from the nightmare! But it’s only after we face the fact that we can begin to break free of the stranglehold of debt.
Excellent! It is all about being at that cliff where jumping is better than standing still. You have to bring yourself to the beginning of the road, don’t you?
Ack! I used my old website stuff without thinking about it!
LOL, old habits die hard.. We’re going to have to start calling you Mr. SB, so you remember. Or just plain Ben. 🙂
“If you aren’t willing to face the leaks in your financial ship, your spending habits are not likely to change” – so true. This is one of the biggest reasons why people fail to get out of debt. They don’t want to change their habits and some are unwilling to even figure out where they are “leaking” money. You may be scared but knowledge is what will take away the fear and help you right the ship. Otherwise you will eventually sink. Great post!
I remember when I first went back and looked at our 2012 spending habits. It was traumatizing, to say the least. I wanted to stop after assessing only 3 months of spending. I felt sick at what we’d wasted last year. But now I’m SO glad we bucked up and faced the music. It’s allowed us to really do much better this year than in the past.
Very good points here. Funny thing is that not everyone who hits rock bottom sees that as a reason to get out. I know someone who has gone bankrupt twice and so the saga continues. When there are these so-called safety nets in place some people still could care less because they think that their life isn’t going to get any better, so who cares. Not the best mentality but it is the truth of some. Living pay to pay may be her reality for the rest of her life and we pray that one day she holds true to her will to be better with her money.
I know people like that too, Mr. CBB. I think often times it allows them to keep spending, as they know they’ll just have the option of filing again anyway. But I don’t think these people have hit their emotional rock bottom yet, and that’s where change really has the chance to occur.
I am helping a reader to eradicate debt and his goals are crazy high, leading to deception and another low. I’ll send him over to check that post, you can’t set unreal goals, just take it slow and steady.
Oh no. Yes, Pauline, I’d love to help him through this series. The next part is about sticking to the plan. Hope the series helps him!
I love just getting to it Laurie. As you know, you and I are a lot alike when it comes to debt. Here is to you kicking your debt in the you know where!
LOL, yeah, together, we could run a serious debt boot camp. 🙂 BIG celebration when our mess is cleaned up.
Great to realize how much potential there is for other pursuits and more in depth pursuit of your current ambitions, when you have to worry about money less.
So true! Can’t wait till we have that debt paid off! Thanks, Mike.
I hope that those of us who are learning to work our way out of debt do our children a great service and teach them how to not get into debt in the first place! My father never taught me about finances, that that was the ‘husbands job’ when I got married. Well, I married 2 men that didn’t pay a bill, thought insurance for health and cars was to much money, and basically thought a grocery store was for snacks!! If my daddy had only taught me…
Patty, SO true!!!! That history of managing money irresponsibly is prevalent in our families as well, and it is our goal to teach our kids differently so that they learn proper budgeting, spend-tracking, saving and frugal money management. I don’t ever want them to have to worry about money like we have! Thanks for sharing your story – I know it will be an inspiration.