Many books have been written about how to get out of debt. Advice is plentiful, but sometimes we need more than a few tips about getting out of debt to motivate us to succeed.
I recently spoke with someone who asked how much money per month they should allow themselves to spend on entertainment. “That depends on how desperately you want to get out of debt,” I replied. I could see in his eyes that he had grasped the concept. Everything hinges on one’s passion for freedom.
There are those who would like to be out of debt, and then there are those who are willing to DO SOMETHING DRASTIC to get out of debt. Of course, we have to be reasonable in our pursuit to break the chains, but that doesn’t mean we should be lackadaisical.
Allow me to give you an example. For the past few months, my wife and I made the difficult decision to temporarily eliminate all discretionary spending. Rather than buy those iced white chocolate mochas or go out to a movie on a Friday night, we decided to kick Sally Mae to the curb. This level of short-term sacrifice is sometimes needed to achieve a goal.
What are some practical tips for getting out of debt?
Destroying any bad financial habits you may have is the first step to obliterate debt. If you’re spending like there’s no tomorrow, getting out of debt becomes a distant dream. You have to eliminate the possibility for failure and get people on your side. Stop overspending! Think intentionally about each purchase before you make it.
Next, you’re going to have to learn some tactics to improve your income. The more money you make above and beyond what it takes to cover your expenses, the better. Take up extra jobs, learn something new, and develop hope to push you to success. You can do it!
Finally, you’ll have to find some ways to de-clutter your financial life. Simplify everything, make it seamless, and design your lifestyle to automatically chip away at your debt. With all the extra money you’ll have by cutting back on expenses and raising your income, you’ll be out of the hole faster than you may think.
Get intense!
Dave Ramsey often speaks about the concept of focused intensity (he calls it Gazelle Intensity). The idea is that you focus on one step at a time and put as much energy as possible in accomplishing your goal.
Too many people try to juggle all of life’s responsibilities at once. Multitasking is a skill that comes in handy at times, but when it comes to getting out of debt, I’m convinced that focused intensity produces better results in the long run. This doesn’t mean you allow your family to starve while you hurl all your dollars and cents at debt. But what it might mean is you put off investing for a SHORT PERIOD OF TIME so that you can be free from the lender.
All the advice in the world won’t change a thing until YOU DECIDE you are ready to get out of debt. If you’re ready and you’ve hit the “I’ve-Had-It” point, it’s time to jump into action.
What you need is determination. Winning is not so much about getting the better interest rate or finding the better investment. It is about behavior modification. Change your behavior, focus on the goal at hand, and you’ll be out of debt faster than you can imagine!
It’ll all be worth it!
All of your sacrifice will pay off. By destroying your debts, you’ll find that you have much more money left at the end of the month to save, invest, and give.
By wiping your debt off the face of the planet, you’ll soon experience less stress and better concentration on the things in life that matter most. You’ll have more time to spend with family and friends, more money to support the ones you love, and an exhilaration of accomplishment like you’ve never felt before.
It’s worth it. Are you ready to take the plunge into financial freedom?
“Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.” -Romans 13:8 NIV
{ 12 comments… read them below or add one }
So true! After just a few months of sacrificing some “wants” and just spending for “needs” my husband and I have paid off all our debt except for one small school loan! (The most recent loan was finished as of this morning!) We are so excited and thrilled, and pleased with the lessons we’ve learned regarding our finances. I wish I could make everyone see how fulfilling it is to be bold about debt and get rid of it. It was definitely worth it!!
Great article!
Very good article. One thing I’d add is the importance of visibility… Know how you are spending your money each month, and know how you got where you are now in terms of debt and overspending. What decisions did you make (or are you making right now!) that caused the problem?
Without that insight you run the risk of making progress on your debts, and then falling back, over and over again.
Another important point is the need to pray over any large financial decision and pray for God’s help to get out of your mess. God doesn’t want to see you enslaved to debt and will help you get rid of it.
You aren’t alone.
Great article, John! You are right, it all boils down to the decision of the one in debt. Like ‘gn’ said above, the issue has to be identified, otherwise it is very easy to fall back into the same routines. And, yes, prayer is crucial.
Personally, I need to come to the realization that the situation is not good and I just cannot stand it any longer. It takes a real jolt of my nervous system through a watershed kind of moment for me to actually change my heart and head. For example, a seminar facilitated by Dave Ramsey or another financial planner is often what it takes for me to change. Other times it may only take a long discussion with a friend that has changed the way they live.
Change is uncomfortable, but that is exactly what it takes to undo all the incurred debt that was the result of so many years of comfort.
We’ve had it with debt, but my husband and I aren’t on the same page as far as getting intense about getting rid of the debt. Mainly because we’ve been saving money for a car…and once thats out of the way we will have more money to focus on debt. If we got intense about it we wouldn’t be able to save for the car. Which I need to get a job!
Great Article John,
It’s basically: no pain – no gain!
Great Article. I found that my Voluntary Simplicity helps with keeping my needs & wants from overtaking my finances. First thou – I always pray on it and the Lord always sends me in the right direction (if I listen, lol)! To still enjoys small things like lattes, frappes, movie theather popcorn, etc. is to invest in a home machine (ebay @ a fraction of the cost) and make them at home. It cost about 1/4 of buying out does. So you can still enjoy life while you cut back, just think outside the box and find it discounted out there. And earning a second income is a must, atleast temporary, to help get out of debt. Now I am just trying to put a years living expenses aside. I will look forward to more helpful articles
I never get tired of reading good posts about getting out of debt. I also agree that it takes a lot of focused intensity. You have to go into it with a mindset and determination. Anything less and it’s too easy to go back to bad habits.
Thanks to all of you for your thoughtful comments!
Shirley, I can understand your enthusiasm in paying off your debt! I think the fulfillment can’t be understood until you’ve actually been there. Great job!
gn, I totally agree that we need to understand how we got into debt in the first place. Understanding our behavior is really a key for not backsliding. I hear you on the prayer part! We incorporate that into the whole process. Thanks for reading!
Mitch Ebie, I appreciate your straight-forward honesty. Change is difficult. Sometimes we need a mentor or friend that can motivate us to make that difficult change. Surround yourself with people who embrace your goals, and you’ll make it! I think you’re headed on the right track . . . keep up the good work!
lencib, it’s okay to put everything on pause to buy transportation. But my question is, how much money are you planning on spending on a vehicle? It shouldn’t take you very long to save up for a set of wheels. Be in constant communication with your husband and once you get a reasonable car (try to limit it less than $3,000 for example), get intense on the debt! You need to be on the same page to win! Hey, thanks for reading! I look forward to hearing about your progress soon. Write me sometime!
The Rich Blog, great summary!
Nan, great money-saving tips! I think you hit an important point. We need to make sure that we enjoy life too. Don’t get so intense that you get discouraged and give up. Treat yourself OCCASIONALLY, but don’t act like you’re rich! Hey, thanks for reading, and if you’re looking forward to more articles, please sign up for a free subscription at thechristiandollar.com/subscribe. Thanks!
Mike, you’re right, determination is key. We all have to ask ourselves how badly we want out of debt. That passion will lead to action. Thanks for your compliment!
I have a poverty-level income, $6K in student loan debt, and monthly student loan payments nearly 10 percent of my income, with minimal progress toward loan payoff.
I am earning a subsistence living buying and reselling sinful goods on ebay.
What would Dave Ramsey say?
“It’s worth it. Are you ready to take the plunge into financial freedom?”
Yes, with God’s help I believe I will get there.
Thanks for this useful post.
Jose
Excellent article. I particularly like the comparison of wishing you were out of debt and busting your butt to make sure it happens. Lots of people wish they were out of debt, but aren’t willing to make any changes, let alone major ones, to reach that goal. I think that lack of willingness to give some things up is a problem on a larger scale too – it’s partly why we’re having such problems with the economy right now.
I just read this article, and I must say it really points out the reality of being in debt and what it takes to change one’s position in life. Great article John. Thanks, Martin