Paying Off Debt - unchain yourself

Let's start paying off debt as part of our approach to frugal living and financial freedom. It won't be easy, but then a life of debt isn't easy either. A good first step could include consolidating what you owe. Find out where to get debt consolidation consultation if needs be. Identify all the influential factors before you take serious steps to consolidate your debt.

If you don't get serious about paying what you owe, debt will make you a financial slave in the chains of another.

When I lived within my means and debt was manageable, my stress was also manageable. When I got "behind the power curve" of debt, my stress levels went through the roof. I didn't have an EZ reliever stress ball, but I sure could have used one. I would have squeezed the life out of that thing.

I'm a big debt chicken, so I stay as far away from debt as I can.

Debt is a lot like quicksand or a tar baby. Once you're stuck in it, it's hard to get out.

With debt, you:

  • get past due notices
  • deal with bill collectors
  • have your utility services terminated
  • pay deposits to get utilities turned back on
  • check often to see if you have money in the bank
  • never get ahead
  • depend on hand outs
  • don't have enough to live on your own
  • get threats of eviction
  • generally live on the financial edge of things

I'm not fond of these things, so let's turn this around with a simple plan. I said it's simple, but it won't be easy. There is lots of work to do, even if your debt isn't overwhelming.

I promised you the good, the bad, the ugly and the bizarre, so here is my story of paying off debt that taught me how to reduce debt and pay it off, all on my own terms.

For those of you treading water with credit card debt, here is an example of how to get rid of debt by refocusing your income.

Getting out of debt takes time and dedication. The best debt advice I can give you is that you'll need motivation to stay dedicated to the task over time.

When you are successful at getting out of debt, you'll toss away a lot of worry and frustration associated with a lifestyle characterized by the burden of debt - a form of enslavement. You'll feel much better, and that will improve your life overall.

What I propose here isn't a solution for everyone, but merely a suggested set of steps for paying off debt that you can take.

The most important part will be you. You need to start being serious about debt reduction. Review my ideas and use what works. Combine with ideas from others.

Make improvements to my suggestions as you see fit.

No matter, get busy paying off debt by doing something that heads you in the right direction. If you're in debt now, you at least know that the course you're on isn't the right direction, so let's consider something very different.

Secure for Yourself a Little Pleasure, Peace of Mind, and Comfort

If you're tired of debt, then you'll need to keep yourself inspired to get through it to the other side. Almost nothing happens without some sort of inspiration. Think about important and meaningful things in your life.

How about a warm house in the winter? What fun could it possibly be to find yourself without adequate shelter in harsh weather? A warm house is great comfort.

What about being able to afford a decent meal for you and your family? Isn't that important enough to dig yourself out of the financial hole and stay out? I sure think it is.

Accumulating savings will be on the list somewhere. It's nice to have a cushion to fall back on during emergencies, and paying off debt will allow you to build an ever larger cushion of savings that helps provide peace of mind.

There is no sense being miserable, living check-to-check, or failing to "makes ends meet". It's time for more responsible living.

If you have no experience in money management or you've never thought about personal finance in a structured manner, then let's explore establishing a basic financial goal as a starting point. Having some basic objective will give you something to shoot at, strive for and be proud of. Objectives also give you a means of measuring your achievement.

Identify Holes in Your Financial Boat

To get rid of debt, you first need to plug the obvious holes in your financial boat before you start bailing. Otherwise what you might save in one place will only be wasted elsewhere. If you don't stop unwise spending habits, then you'll simply be running in place and getting nowhere fast.

Holes in the financial boat are identified by realizing what it is you spend money on - perhaps you're a spendthrift. It's also necessary to recognize why you spend money in a manner that gets you into debt - perhaps you're addicted to spending money.

It also helps to see clearly where you are and where you are heading. Make a financial self-assessment of your household budget and get it on paper. Stick it right there in your face. This keeps the ball in front of you.

Every hole you plug allows you to redirect that money to paying off debt or accumulating savings, and that gets you headed in the right direction.

Recognize Unwise Spending

Next, let's list the reasons you spend money that you regret later on. This will help you know what poor spending decisions look like. These should be "red flags" in your world of personal finance.

Identify things like convenience, satisfaction of getting what you want, feeling of affluence, getting a great deal, having the latest gadget, and keeping up with the neighbors. The list can be very large, so it will take some time.

Recognize the excuses we use for unwise spending. Learn more about unwise and compulsive spending so you can be better prepared to address the problem.

It should be easy to identify things that you don't need to be spending money on. The more you cut out, the more that can be redirected to paying off debt or accumulating savings.

Plan for Success and Identify Criteria for Wise Spending

Now that we've made some effort to stop the financial nosedive, it's time to turn away from crisis management and start to be proactive about our financial condition. Here is where we get serious about adding structure to your world of personal finance.

Any effective management effort requires a plan, so let's start planning for success instead of just sailing along and letting life happen all around us. Here is where we make deliberate efforts to make things happen for ourselves.

We'll need wise spending, so we better have a well thought out life plan to help guide us. I'm talking about something that is comprehensive in nature. Many of us know where we are going in a general manner, but few of us have a clear life plan.

Whether you're focused on paying off debt, getting ahead, or simply being more responsible about your finances, a game plan for life will be important tool - assuming you use it. I had a plan early in my career and followed it to success. When I turned my back on the plan, I found myself staring down the barrel of paying off debt for many years.

Planning has always worked well for me - when I stuck with it. You've probably heard: "If you don't plan, then you plan to fail". That's probably why many of us got into "debt quicksand" - we didn't have a plan. That's also why many of us are still sinking deeper and deeper - we still don't have a plan.

You can change all of that if you really want to be successful at paying off debt. Planning is easy and fun. It's a little like realistic dreaming. It's building a road map for you to follow.

Once you have a general plan for success (or for paying off debt), then you can start to establish meaningful goals that are directly related to the plan. These will be much more structured than the basic financial goal mentioned above.

Next, you have to set criteria for wise spending. We should be better prepared for this because we previously identified "holes in the financial boat" and other regrettable spending decisions. Here we want to turn ourselves 180 degrees from those type of activities, and begin to understand what good spending decisions look like.

An evaluation of need is a great place to start. There is also factors like return on investment, urgency and evaluation of risk. Using these core evaluation criteria, you can start to make better decisions about spending money and help prevent loss of your hard earned money by avoiding liabilities.

Other criteria you might consider include: avoided repair/replacement costs over the long haul, dictates of timing, unavoidable expenses, investments that make money, and unavailability of alternatives.

Criteria for wise spending are the "thumbs up" for spending money more wisely. The opposite of the "red flags".

Meeting one or more of the criteria doesn't necessarily mean a proposed expenditure is wise, but at least you'll become more familiar with what good spending decisions should look like.

Wise spending decisions not only meet certain criteria, but they also relate to meaningful goals discussed above. Meaningful goals come from articulation of a life plan. If you don't have a plan, then you need to get thinking about one now.

Learn about creating a plan for cheap living that includes meaningful goals and criteria for wise spending. The overall structure of a plan, with its goals and good criteria for spending will be keys to paying off debt, accumulating savings, and being financially successful.





Become Mentally Tough About Making Decisions

If you're going to be paying off debt, you'll need to stay mentally tough to make certain you don't violate your criteria for spending decisions, while being watchful for the "red flags" as well.

You might ask yourself for each spending decision whether it gets you closer to your goals or farther away. Getting you closer is of course your focus.

Learn about mental toughness and how it can help you stay on course to financial success. It's more than simply your "game face", it's a great way to deal with any of life's many challenges.

Get Serious and Get it Done

It is so much easier to stay out of debt than it is to face paying off debt. Think of careful driving on a slick road surface - that's staying out of debt. That's something we can all do, and it isn't so difficult. It just takes skill, discipline, paying attention and good decision making.

Think of sliding and spinning at high speed on a slick road surface - that's trying to pay off your debt. You might recover from the fishtail, or you might loose control. It all depends on how fast and reckless you were getting into it in the first place.

Think about sliding off the road and crashing in the ditch or worse yet, colliding with other vehicles on the road - that's financial failure. You've lost control and you're going to get hurt financially, and you might take others with you. It's right about now that you're wishing you had done a better job of managing your personal finances.

There is no sense being in a deep financial hole, so stop digging now, set down some hard and fast rules, and get focused on things that are important for you and your family. Be disciplined and aware of the consequences of your financial decisions and you'll stay in control of your finances.

Paying off debt will be a challenge, but it isn't impossible, and it doesn't have to be extremely difficult either. Most of the challenges associated with paying off debt are in your mind.

Agonizing over your debt doesn't help - action does. Whether you like it or not, you are a big part of the problem, even if you share this debt with another. If you're in it alone, you have all the blame.

Regardless, you need to draw a line in the sand now and stand firm. If you don't, things won't get better on their own, and you'll regret having allowed it to continue on its current course.

Adopt a mindset of frugal living and get to paying off debt. This will bring you closer to that great feeling of financial freedom and peace of mind. Avoid paying off debt, and you remain a financial slave. The choice is all yours.


Done with Paying Off Debt - take me Home

There certainly is a broad scope of topics here at Frugal Living Freedom. When you think about it, money permeates so very many activities in our lives, therefore, being frugal encompasses a wide range of interests, from being employed to taking a vacation, and just about everything in between. Enjoy the variety, pick up some new ideas, and start making frugality a part of your signature.



I'm a big proponent of being debt-free, and I mean entirely debt-free - no mortgage payment. It's not essential for financial freedom, but you'll love the feeling once you get there. If you didn't have a rent or mortgage payment, how much more could you do for yourself with your current level of income? I suspect plenty.











If you ever hope to see an abundance of wealth, you need to plug the hole in your boat. The wealthy don't necessarily make lots of money, instead, they know how to hang onto what they make, and make it work for them.