As I talk with in-real-life people about our journey to pay off debt, I see a constant theme running through many of their heads. First, they get a look on their face as they think about their debt that is equivalent to if I’d asked them to climb Mt. Kilimanjaro. Second, they drop their heads in shame, guilt and/or hopelessness. Third, they abandon the idea of debt freedom for themselves as they imagine the work that needs to be done to pay their debt off.
I totally get it.
Especially in the first year of our journey to become debt free, I really struggled a LOT with guilt and hopelessness. I spent the first three or four months chastising myself for the stupid decisions that got us to where we were in the first place. I spent the next year wondering why on earth we were even bothering to try. We started out with a 65% debt-to-income ratio (meaning that our total debt payments equaled 65% of our gross monthly income). For those not in the know, that is extraordinarily high. Most mortgage companies will not approve you for a mortgage payment that puts your DTI above 45%.
From a purely numbers standpoint, our situation seemed mighty hopeless. Sometimes it still does. Our current DTI is “down” to about 57%. The road going is slow. There have been many times we’ve talked about throwing in the towel and filing for bankruptcy, but as I told hubby the last time we talked about it, “We are seeing this thing through to the end.”
Recommended Reading: Train Your Way to Financial Fitness
I talk in this article about how beating the broke mindset is vital to overcoming debt and learning to grow wealth. Part of the reason our past attempts to pay off debt never worked is because we continued to see ourselves as financial failures. We’d make a plan to pay off debt, hit a bump in the road that got us off track, and simply give up. This happened to us dozens of times.
Change Your Mind
Then we finally got our “mindset shift”. We decided to change our minds. What is the mindset shift that you have to make if you truly want to change your financial family tree forever? Here goes:
- You have to know and understand what the 6 Mistakes Broke People Make are. Once you understand the mistakes you are making that have caused you to continue to be broke, you can stop making them.
- You have to know and understand what the 6 Lies Broke People Believe are. Once you are aware of the lies that you’re believing that are keeping you broke, you can stop believing them.
- You have to decide in your heart that financial freedom (long-term benefit) is more valuable to you than what you want today (short-term rewards/instant gratification).
- You have to make a decision in your heart that you will continue to work to pay down debt no matter what. When a bump in the road comes – big or little – you have to choose to get back up on that horse and continue your path. Every. Single. Day. Until the debt is gone.
- You have to hone your ability to think big-picture, long-term. You have to work to imagine the future every day, and purpose in your heart what you want that future to look like from a financial standpoint. Get scared if you have to and imagine yourself the same or deeper in debt than you are now. Imagine if you suffer a job layoff or some other financial blow that will reduce your income and leave you unable to pay all of your bills. Do whatever it takes to keep your eye on the future in a way that will keep you motivated to dump debt for good and make permanent changes in how you view, manage and spend money.
- You have to have a serious handle on what your true priorities are. You might think you want a new iPhone 6 or a bigger house, but are those things truly more important to you than having financial freedom? If so, you’re not ready to begin a journey to debt free. Don’t bother troubling yourself.
- You have to do whatever you need to do to keep yourself motivated. Make short and long-term written goals and monitor them regularly. Make whatever type of motivational chart you have to. Track expenses. Make it a game to see how much money you can NOT spend in a given week or month. Watch your progress carefully as you pay off one debt at a time (starting with the smallest – this will give you instant encouragement) and celebrate each victory. This month saw two of our debts drop below $10k. That is something to celebrate! Don’t diminish your victories in the area of paying off debt, no matter how small.
The last almost-three-years have been some very tough years for us as we’ve had some serious ups and downs in a number of areas. There’ve been major events that have tempted us greatly to give up on debt repayment. There’ve been smaller events that seemed big, such as a twice-flooded laundry room that needed to be repaired, a broken fridge, the irretrievable breakdown of our only TV, and our house roof needing to be replaced to the tune of 8k. Those events have caused us to think seriously about giving up on being debt free.
But we choose to keep trying, no matter how pointless our efforts at debt repayment seem. Has this been difficult? HELL YES.
But the dream we have of “owing no man” is ingrained in our hearts and keeps us going. We’ve shifted our mindset from a hopeless one to a hopeFUL one, and it’s that mindset shift that will assure we succeed, and will assure you succeed too. So, GO FOR IT. Change your mind and take those first steps now to become debt free. You got this.