(ThyBlackMan.com) Paying off debt is stressful, there is nothing easy about it especially when you have a limited salary and bills to pay—I mean, all you can do is think about making ends meet!
However, until you get over these negative feelings about debt, you are going to continue to struggle. I am in no way suggesting you should ignore how you feel about the debt you have accumulated, but once you get into the right frame of mind about it and set a realistic goal, it will alleviate some of the pressure.
If you want to get out of debt, the first step is to change your mindset. Here are some steps on how to do this.
Debt Is Not Normal
Where do your ideas on debt come from?
Unfortunately, the majority of us were raised in households where it was normal to be in debt. More often than not, our parents argued about debt because one or both of our parents had bad spending habits. And, check this out below for more information:
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You may have witnessed your mother or father working two jobs but still not managing to make ends meet. When this is what you have seen your entire life, it becomes normal to you, and before long, you are in the same situation.
But, it is important to understand that it is not normal to be in debt that you can’t afford to pay back.
Good and Bad Debt
Do you know what separates good debt from bad debt?
There is a difference between good and bad debt. In fact, if you know how to leverage debt, it can work in your favor. Good credit history is important, and it is said that the only way to build your credit score is to get into debt.
But not all debt is equal; here is the difference.
Good Debt. Good debts are those that you will benefit from in the future. These include business loans, home mortgages, and student loans. You can view loans of this nature as investments. House prices appreciate over time which means you can either sell the property and make a profit, or you can take the equity out of the house and reinvest it.
A business loan will enable you to develop and grow your business enabling you to make more money. And a student loan means that you can get a good education that will increase your earning potential. In short, good debts are assets.
Bad Debt. Bad debts are liabilities, there is no value in them, and they often lead to you getting a bad credit score. Bad debt is the debt you can’t afford to pay back such as credit cards. There is nothing wrong with owning credit cards when you can afford to pay them off in full every month.
When you spend excessively and only pay the minimum balance at the end of the month, you are charged interest on what you have spent. Over time, you can end up paying more in interest than the debt itself. Bad debt also has a negative effect on your credit history.
Take Responsibility
Whose name is the debt in?
Playing the blame game is a lot easier than taking responsibility. The bottom line is that you are in debt because of your irresponsible spending habits.
A lot of people will convince themselves they are in debt because the world is rigged. “My salary isn’t enough,” “credit cards are a rip-off” or “medical bills are extortionist.”
No matter how many reasons you can come up with about the debt you are in, it’s in your name and you are the only person responsible for paying it back. Once you accept this, you make room for the mindset required to start taking action.
Debt Is an Obstacle
What is the difference between a burden and an obstacle?
A burden is something you carry around at all times that weighs you down. An obstacle on the other hand is a temporary setback that you can eventually overcome.
Instead of accepting that you will never be able to get out of debt, change the way you think about it, and you will start seeing the light at the end of the tunnel. Once you change your perspective about your debt, it will motivate you to come up with a plan and stick to it.
You Will Need a Plan
Are you organized?
Without a plan, you are setting yourself up for failure. If you don’t know how to get to your destination, you will just end up driving around in circles and you will never arrive.
When you have a plan, you know what you are aiming for and you have put a strategy in place to ensure that you achieve your goals. Get a pen and paper and follow these steps:
- Write out your debts. Make a list of all your creditors, the amounts you owe and the interest percentage on each debt.
- Make cuts. The majority of people waste money on non-essentials like buying a coffee before work, newspapers, magazines, cigarettes, eating out, or bottled water. If you are guilty of this, these are just a few of the expenses you can eliminate from your budget, you can then put the extra money towards paying down debt.
- Make extra money. Whether you get a second job, put in overtime on the weekends or start a side hustle, find a way of getting some extra money into your bank account. If you have a talent, you can start using it straight away to make some extra cash. Maybe you know how to bake cakes, braid, or cut hair. You can even wash cars and mow lawns, there are plenty of things you can do to start a side hustle.
- Timelines. When do you want to get out of debt? It is easier to come up with a time frame once you know how much extra money you can save and the additional income you will bring into your bank account.
Get Some Discipline
Are you truly mentally focused?
Your debt is not going to pay itself off, you will need discipline to succeed. It takes discipline to stop eating takeout and start cooking. If you have a smoking habit, it will take discipline to quit. If you start a side hustle or get a second job, it will take discipline to go to work instead of lounging.
It will take discipline to see extra money coming in and not spend it on the luxuries you are used to enjoying. You will not be able to pay off your debt if you are not disciplined.
Don’t Take It Too Seriously
Do you know how to reward yourself without overspending?
It is never a good thing to accumulate bad debt; however, don’t let paying it back take over your life. Having debt is stressful, and many people find it difficult to cope with, but you can make the experience more enjoyable by rewarding yourself every time you reach a milestone.
Let’s say you’ve got three credit cards to pay off, after clearing the balance on each card, treat yourself to dinner at your favorite restaurant, or you can go and watch a movie. Whatever you find enjoyable, go out and do it, just don’t overspend and so that you end up with more debt. Pay for your rewards in cash, don’t use a credit card.
Practice Gratitude
Are you grateful to be here?
It’s okay to feel resentful that you’ve got all this debt to pay and you’ve got to cut back on things you enjoy. No doubt you are going to get tired of hearing about your friends’ vacations and the renovations they are doing on their house. But it’s important to practice gratitude or you will end up walking around with a chip on your shoulder.
Every morning, make an effort to consider all the things you are grateful for. One of the most important should be that you are alive and you have the chance to pay off your debt. You might want a higher paying job, but express gratitude for the job you have because it keeps a roof over your head and food on the table.
Get a journal and a pen and keep it on your bedside table, every morning write down three things you are grateful for.
Once you have written them down, spend time soaking up the emotions and the feelings of gratitude, it will set the tone of your day and motivate you to achieve your goals.
Final Thought
Getting out of debt is going to take some work, but if you put a plan in place and remain committed to it, you will eventually enjoy the rewards of a debt-free life.
Staff Writer; Chris Poole