Welcome back for the fourth and final post on our “How and Why You Should Get out of Debt” miniseries. The first part, the intro, was a basic introduction to what we’d talk about during the series. the next post, part 1, First Things First, talked about what needed to be done first if getting out of debt would be a successful venture for you. The third post in the series, part 2, focused on dealing with roadblocks, what to expect and how to overcome them.
Today, we’ll talk about staying the course. IMHO, this step is just as tough as dealing with the hurdles that come with any journey: the roadblocks.
Staying the course is the longest part of the journey, and it’s the part of the journey that’s going to require you to muster all of the stick-to-it-iveness you can find. Why? Two main reasons: boredom and discouragement.
As with any goal, whether it’s eating healthier, exercising, starting a business or whatever, paying down debt hits a point where it becomes mundane. Budgeting makes you nauseous. Not spending gets tiring. Revisiting your goals – again – becomes unbearable.
What to do? I mean, let’s face it: once you’ve reached the boredom stage, you’ve likely still got a long way to go. How to handle this?
Remind yourself that this is not a “diet” necessarily, but a “lifestyle change”
If your goals are to pay off debt so you can go back to blowing your money any way you please, yes, this is a diet. But I have to warn you that if this is your goal, you might want to re-think it. If, for instance, the only reason you want to lose 30 pounds is so you can go back to eating fries and cookies every night, the weight isn’t likely to stay off for very long.
Similarly, if the whole point of this journey for you is to be able to waste all of your money on instant gratification stuff, but to do it without having debt hanging over your head, beware: you’ll likely end up right back in debt again.
True financial freedom requires a mindset change: one that leads you to make all decisions (or at least most decisions), from now on and forever more, on a value-based spending system. In other words, you need to have figured out your goals for your income and decided what’s most important to you. Once you have a goal for your money, including some long-term goals (as in “I want to retire in 10 years. During retirement, I want to travel the world.), then it’s easier to get out of the bored stage and into a destination-driven mindset. You always have to have somewhere that you want your money to go, or you’ll go back to wasting it on piddly, unimportant stuff. If you have somewhere for your money to go, you won’t be bored with your journey because you’ll always have a goal for it.
Evaluate what is important to you
Is going to Taco Bell 5 times a week part of your long term plan? If not, then stop wasting the $25 bucks a week on it and re-evaluate what your life’s goals are. That $25 a week can get you a vacation to the Caribbean in a year! Which spending choice is going to provide you with more long-term happiness and/or memories? I’m guessing it’s the vacation, but that’s for you to decide.
Part of the journey that, for us, has been really difficult, is seeing the numbers move SO slowly. We’ve got a pretty high debt-to-income ratio right now, so our debt payoff is taking F – O – R – E – V – E – R. We’re not seeing results nearly as quickly as we’d like to, and sometimes it tempts us to throw in the towel. We get super discouraged. Most debt payoff journeys do take a few years, so how can you combat the temptation to give up when the numbers are moving too slowly?
Change Your Expectations
Get it set in your mind that this is a 3 or 5 or 10-year journey, not a six-month journey. Make charts, graphs, record your progress and mark off your accomplishments. For us, our original goal was to get through one year of back-to-basics spending. We’re nearing the half-way point now, and it’s fun to see on our chart that nearly half of the 365 days are colored in.
Track Your Progress
When you get discouraged, go back and look at how far you’ve come. Every dollar less in debt that you have today compared to when you started makes a difference. It really does! Track each month’s debt totals, minimum payments and interest paid. Then encourage yourself by watching the numbers go down every month.
Gain Some Momentum
Sell something. Earn money. Find a way to put an extra $100, $500 or $1,000 towards your debts. This will motivate you and encourage you as you see a big gain toward your goal.
Look for Motivation
Read personal finance blogs and debt payoff success stories. Spend a few minutes dreaming of what your life will be like when you’re debt free. Imagine how it will feel to be able to retire at 50. Do what you need to do to revisit the momentum and excitement that got you started on this journey in the first place.
Friends, you can get out of debt, and you should get out of debt. There are a million reasons why, and not very many reasons why you should continue slaving away to pay big banks your hard-earned money for no good reason. So figure out your list of “whys” and start on your journey to financial independence today.