Today is Friday the 31st. We are just around the corner from a brand new week and a brand new month. It’s a new opportunity to “start fresh,” especially with your finances. So, with that said, I have just one goal today: to motivate you to attack and reduce your debts.
Debt really sucks!
For some of us, this simple statement is all the encouragement we need. We’re fed up with our situation and are ready to spring into action. Personally, I could just stop writing now, having already motivated myself to continue my passionate and fiery Debt-Free Adventure.
What about you, though? Are you properly motivated to get rid of your debt? If not, what will it take? Here are a few things to think about, which will (hopefully) kick start your motivation. They will also help you establish and maintain a proper relationship with your debt.
How much interest are you paying?
Have you ever sat down to calculate your interest payments, to determine precisely how much you pay in interest each month? If not, I encourage you to do so. You might be in for a dreadful surprise — and hopefully some powerful motivation.
Related: The Power of Compound Interest
Simply calculating how much interest I was paying has been the single most powerful source of motivation in my quest to get out of debt. I added up the interest paid each month on my mortgages, student loans, auto loans, and credit cards. And I was disgusted to realize that I was paying out nearly $1, 300/month in interest alone!
How much are you paying?
Debt is not a game
Lenders spend billions of dollars in research and marketing to figure out the best way to separate you from your money. They’re throwing everything they can at us in an attempt to suck our money right out of our pockets.
Are you fighting back? Are you even prepared to fight? Many people are handing their money over faster than they can earn it! To be successful, we need to be equipped with the whole armor of personal finance. Even when we intentionally go into debt for what we deem to be necessary expenses (mortgage loans, student loans, etc.), we need to know exactly how much it will cost us in the long run… and whether the cost will be worth the impact.
Do you really need hundreds of channels?
Sure, TV can be useful, but let’s be brutally honest with ourselves: TV is an enormous waste of time. Does knowing who won “The Biggest Loser” or “The Amazing Race” help you achieve anything or better yourself in any way? No, absolutely not.
I’m not saying that these things aren’t entertaining, or that you don’t deserve to relax with some mindless television (or a sports game) every once in a while. I’m simply challenging you to spend your time — and money — doing things that are more productive. Things that can improve your situation. Things that will make you a better person. Do you really need to pay $100+ every month (or over $1,200 a year) for TV service? Is it worth that to you?
“The average millionaire can’t tell you who got thrown off the island last night.” -Dave Ramsey
Learn the power of simplicity
Remember back to when you didn’t have a pot to… well, you get the idea.
For me, those days were partly nice and partly burdensome. I wanted more money to buy more things, but I also remember the freedom of not being beholden to anyone for anything!
For some reason, right or wrong, our culture drives us down a certain path — go to college, get a job, get married, buy a house, buy a bunch of stuff, etc. My wife and I followed that path for the first few years of our marriage. While that lifestyle afforded us some nice stuff, it also resulted in a mountain of debt.
More recently, we’ve learned the power of simplicity. One day, we stopped to consider our possessions now versus our possessions as college students. Sure, our stuff is nicer now, and we have more of it, but… We’re also in debt! Simplifying life not only saves money, but it makes us happier, as well.
Less debt equals more freedom
The amount of money you owe to others is directly correlated with the amount of time that you HAVE to devote to earning more money. This is especially true if you’re unhappy working a job that you dislike, in order to pay for things that you don’t really want.
Well, wake up — you don’t have to do it anymore! Start making changes. Sell some stuff; get rid of a car; reduce your housing expenses, and attack your debt. While you might enjoy your job, wouldn’t it be nice to work because you want to, instead of working because you have to?
Simplifying your life, living frugally, and spending less than you earn are three things you can do RIGHT NOW to reduce your debt and regain some of that freedom and independence that you used to enjoy. Always remember that Debt = Slavery. No, you’re not bound in chains and forced to work in a labor camp, but your options are definitely limited when you’re in debt.
Do you own your house? Do you own your car(s)? Do you own your education? Do you own all of the clothes in your closet? Do you own your wedding? Do you own your toys? Do you own the gas in your car?
If you’re carrying any sort of debt, then the answer to at least some of those questions is “no.” So tell me… Are you truly free when you’re beholden to others in this way? Take some time to re-evaluate your debt and ask yourself if the burden you are carrying is worth the benefit of whatever got you into debt. Then, make some changes.