Do you feel like your debt is holding you back from living life to the fullest?
Are you afraid that if you had an unexpected drop in income or increase in your expenses that it would put you in financial stress?
That’s how we felt when we started our debt free journey three years ago.
When my husband and I decided to pay off all of our debt, including our mortgage by the time we turn forty, we did so in part because I had just become a stay-at-home mom and we felt extremely vulnerable voluntarily dropping down to one income.
At the time, our son was not quite two, and I was pregnant with our daughter. Having one young child and another one on the way, we felt irresponsible knowing that if for some reason, my husband were to lose his job, we would only be able to survive on our savings for a few months with all of our financial obligations, including our debt.
The other reason we decided to eliminate all of our debt as quickly as possible was because we heard a success story of a young family, similar to ours, who had just paid off all of their debt, including their mortgage. They had two young kids and lived on a single income, and we knew that if they could do it, then so could we.
So we dug in and in two years, we paid off $120,000 of debt on a single, middle-class income!
If you’re ready to get out of debt, then here are three things you must do to set yourself up for success!
Get your head out of the sand.
A lot of people avoid looking at how much total debt they have.
If you’re serious about getting out of debt, then it’s time to come to terms with reality and face the truth. No matter what your total debt balance is, you’ve got to get really clear on your starting point so you can look back with pride and say, “We paid off $X amount of debt!”
This part is difficult for so many people because they fear that their total debt is going to be overwhelming and they’ll get discouraged.
But ignorance is not bliss here.
Your total debt just might be less than you think, and if it does turn out to be more than you realize, use that as motivation to get out of debt fast and get out of debt now.
Which leads to the second thing you must do to set yourself up for success —
Draw a line in the sand.
You must commit to getting rid of the debt and stop adding to your debt pile!
Raise your right hand and repeat after me: “From this point on, my debt is going DOWN! I will no longer rely on debt to fund my lifestyle. I am committed to getting rid of my debt, no matter what it takes!”
Get mad at the debt and the thousands of dollars of interest you’ve already paid. Think about the thousands of dollars in interest you’ll be saving by paying your debt off quickly.
Focus on what you’ll be able to do with your money once the debt is gone and you’re no longer tied to those payments. How much money are you paying each month toward debt? Look at that number and think about how quickly you can save for your kids’ college or save more for retirement or for that family vacation you’ve been putting off. Maybe you’ll use that money to invest in real estate or start a business to bring in even more income and create true financial freedom for yourself and your family.
Get really clear on what life will be like without the debt hanging over you and draw a line in the sand on debt.
Once you’ve done that, then it’s time to…
Build your financial castle on the rock, not the sand.
Okay, okay, I was really trying to continue with the sand theme so this one may be a bit of a stretch, but my point is that you’ve got to have a stable plan to get out of debt.
I work with a lot of people who want to get out of debt, and they’ve tried to pay a bit extra here and a bit extra there, but they have no real plan.
As the saying goes, “If you fail to plan, you plan to fail.”
This is what I do when I work with my coaching clients. I take them through my 6-step Debt Freedom System to develop their comprehensive roadmap to debt freedom.
Maybe all of this sounds great, but you might be thinking, “Yeah, Monica, it would be nice to get rid of the debt, and maybe you can get out of debt living on a middle-class income, but I make barely more than minimum wage, and my debt is up to my eyeballs! It’s not possible for me. I’m just stuck!”
I hear you, and I understand where you’re coming from.
When I was deep in credit card debt, I was making only $9 an hour. I couldn’t keep up with all of my bills. I had to choose which ones I was going to pay each month. I was overwhelmed and discouraged.
But you know what? I realized that my income wasn’t set in stone.
And yours isn’t either.
If you say it’s impossible to get out of debt, then you need to revisit step 2 and re-evaluate your commitment.
I guarantee you that there is someone out there who has gotten out of debt on a lower income than you, and I guarantee that there is someone out there who has paid off more debt than you have right now.
Anyone with any income and in any situation can get out of debt.
[bctt tweet=”Anyone with any income and in any situation can get out of debt.” username=”MonicaRLouie”]
Let me share two examples:
Miriam was a young woman in her late 20s when she was fed up with having to say “No” to every opportunity that came her way because she “couldn’t afford it.” But she realized that she was in control of her situation. She could decide to continue to live feeling trapped because of her debt, or she could do something about it.
So she committed to getting out of debt as quickly as possible so that she could enjoy her life. In 10 months, she paid off $25,000 of debt on a $35,000 income. She didn’t move in with her parents, but she did cut costs dramatically and got creative about how to bring in extra income.
And do you know what she did once the debt was gone? She saved up more money and when she turned 29, she went on a year-long road trip to visit all 50 states before her 30th birthday.
She turned 30 last August, and do you know where Miriam is now? She settled in Hawaii after her road trip. She’s no longer saying “no” to life. Now she’s able to say “yes” to whatever she wants because she made the decision to get out of debt. You can learn more about Miriam’s story here.
I’ll tell you quickly about another success story. The Millers paid off $137,000 of debt in four years, and during that time, they went from having four kids to having five. So that family of 7 paid off $137,000 of debt in four years!You might think that they made good money during this time to be able to pay off that much debt in a relatively short amount of time. Ella was mostly busy taking care of the kids but she would do odd jobs here and there to bring in more money so Lavern was and is their primary breadwinner. And during that time that they were paying off their debt,
Lavern never made more than $14.50 per hour.Ella shares about the sacrifices and the tough decisions they made on my blog. Today, they’ve purchased a piece of property and have a plan to pay off their mortgage so they can be completely debt-free. You can learn more about Ella and Lavern’s story here.
You can break free from debt.
It is possible for anyone on any income and in any situation to do so.
I challenge you to think about what life could be like if you didn’t have to make any payments toward debt. Would you have an extra $500, $1,000, $2,000 or more each month if your debt was completely gone? What could you do with that money? Would you have less stress if there was a sudden change in your income or cost of living?
All you have to do to get started and set yourself up for success is to:
- get your head out of the sand and face the truth,
- draw a line in the sand and commit to getting out of debt no matter what it takes, and once you’ve done that,
- don’t build your financial castle on the sand. Instead, create a solid, comprehensive plan to build your financial castle on stable ground.
I guarantee that anyone can get out of debt and do so quickly. If it is possible for Miriam and the Millers, then it is possible for you.
Now I’d love to hear about you!
What, if anything, is holding you back from digging out from your debt pile? Which of these three strategies do you need to implement? Please share in the comments below.
Have you joined our free community yet?
I invite you to join me in our private Facebook group called Your Debt Freedom Family, where I share more tips like this. We’ve got an energetic community of people who are kicking debt to the curb so they can break free and live life on their terms.
I’d love to see you there!
Keep moving forward toward your goals. You really can live the life you dream about!