How to pay off debt: first change your mindset When I work out at the gym I like to listen to Rick Ross. Since I cancelled my Spotify account ($10.00 to choose what song I want to listen to, no thanks) I no longer get the luxury of choosing which songs I get to listen to. My only option is to rely on shuffle mode. Anyway, so I’m on treadmill incline is set to 8.5, speed is at 4.0 and the next song starts playing. Which isn’t even a song it’s a skit. “Fendi fur ($3,500+), black face Rolex ($12,700+), Tom Ford thigh highs ($2,500+), Crocodile Birkin ($70,000+) I’m set, I’m not basic right here. No basic bit*$s allowed.” Wait what?! So I’m basic if I don’t own these “luxury” items. My student loan debt is less than a crocodile Birkin purse, thank God. Luckily the way my mindset is set up I don’t believe that if I don’t own certain items that I’m basic. The real definition of basic:
Let me tell you what’s basic, spending more than you make, that’s basic. Having thousands of dollars in credit card debt yet still going out to eat, and on vacations as if you’re not swimming in debt is basic. Swiping your credit card to buy expensive clothing that you can’t afford is basic.[Tweet “Let me tell you what’s basic, spending more than you make, that’s basic.”] Don’t be basic, por favor. Somewhere there’s a girl thinking that she needs these items to feel successful. And it’s not just women that think this way. I was on the train a few weeks ago and I overheard these young guys talking. “I almost have $400 saved for my Gucci belt. I can’t wait, I need that belt.” Dudes can be basic too, go and brush ya shoulders off. You’ve convinced yourselves that you need these items, but you really don’t. Need is an interesting word. In fact we need very little to survive, yet so many of us have so many items. We convince ourselves that we need a fancy car to drive around in. Whether you have a fancy car or have a less expensive car you will still have to wait in traffic. I think it’s funny when people assume that if you don’t own a car or you’re taking the train and bus that you’re poor. When in reality people who ride their bikes, or walk and use public transportation are saving so much money and getting exercise. Shift your thinking. Lately I’ve been shifting my focus from buying more to becoming more. Becoming more to me is developing my body by eating healthy and working out, reading more books to strengthen the mind, writing, and working on my design skills. My summer wardrobe will be simple because I have luxury goals that I would rather save my money for instead. Goals that will help me build wealth. Do you know what is stopping people from building wealth? Debt! Debt is keeping you from building wealth. “The single most dangerous obstacle to building wealth: Debt.” In order to help you take control of your financial destiny, you’re going to have to take control of your debt. The more debt you have, the longer it’s going to take you to build wealth. This is because instead of having money to put aside to save and invest, you now have to put this money towards paying off your loans, or credit cards, or that old bill that’s in collections or any other debt you have. When you have lots of debt it puts a constraint on your other goals. Many of the people who signed up for the organize your finances contest all have the same thing in common: debt. They have debt and they also have other goals they want to reach. Some of them even struggle with paying off their debt because they don’t want to feel trapped as if they can’t enjoy their life so they spend their money on other things and pay the minimum amount on their debt. The less debt you have the freer you are. Imagine if you didn’t have any debt how much money you would have to save and invest.
Below is a quote from a personal finance blogger who was able to retire at 30 called Mr. Money Mustache:
“Most people are far too complacent about debt in this country, so I try to shake up that perception a little. For example, it is considered normal to borrow money when buying a new car, when in fact it is a completely ridiculous bit of financial suicide. People accept credit card debt (and pay 20-percent interest on it) with a sigh of resignation, while continuing to do things like buy gourmet coffee or go out to dinner.
If you have credit card debt, you should feel like your hair is on fire. You shouldn’t be eating anything beyond baked potatoes and tap water or doing anything besides working overtime and sleeping until you get out of that emergency. I’ve never been that frugal myself, but that’s because I have never gotten into credit card debt.” http://www.vox.com/personal-finance/2015/2/25/8091749/mr-money-mustache-retirement
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My hair isn’t on fire from credit card debt because I’ve paid it off, however I’m still working on my student loan payments. Before I knew much about debt I would only pay the minimum amount, but now I put down extra to alleviate the debt faster. I encourage you to do the same.
How to get rid of your debt:
- If at first you have a ton of credit card debt I would recommend knocking that out the way.
- Eliminate non essential spending.
- Once your credit card debt is paid off then use the same amount of money you were paying on your credit cards, but put it towards your student loan debt with the highest interest.
- Then move on to the next loan with the highest interest.
- Once your debt is paid off you’ll have more money to save and invest. Whoop Woot!
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