I see a lot of questions about how to get out of consumer and student loan debt. In retrospect, I identified seven steps that allowed me to get rid of about $75,000 in debt:
- Get Aggressive. Make up your mind that you are no longer going to be someone who is broke. Yes, if you have more debt than you have assets your a broke. Tell yourself, “I am not the kind of person who is broke.”
- Get organized. Make an honest accounting of what you owe and at what interest rates. Write out who you owe (lender), the principal, and the interest. Declare your independence from debt. Prioritize the highest interest debt and attack it!
- Consolidate and Refinance Your Debt. Get your debt to the lowest interest rates you can by refinancing student loans or transferring consumer debt to introductory rate credit cards.
- Throw every extra dollar you have at the debt. Every dollar counts and the battle is to get the debts to zero one-by-one as quickly as you can. Yeah, you’re going to have a selective social life and you need to be creative. Don’t throw money at problems, use your brain and resources to solve them, come up with free entertainment, lower your food bill, get a side hustle, etc. There are so many free resources with ideas on how to lower your expenses. Slash your expenses and then if you feel deprivation slowly add things back. In the meantime, every extra dollar outside of your FRUIT (food, rent/mortgage, utilities, insurance, and taxes) goes to paying off these bloody loans!
- Track Your Debt Obsessively. I tracked my debt balances daily in a spreadsheet. Each time you make the line go down it should build confidence you can do it again and again. Make that line go to zero at all costs. Celebrate each time you make it go downward.
- Increase Your Income. Work hard to make yourself valuable. Find a new job if you cannot earn more at your current job. Get additional work. No work is beneath you when you are broke. Increasing your income while reducing your expenses with put you on the fast track to getting rid of your student loans.
- Don’t beat yourself up. Allow yourself to have fun. The past is the past. Use your debt destroying mission to your advantage to boost confidence that you can competently work a plan with focus and discipline. As Jocko Willink says, “Discipline Equals Freedom.” Get yourself free of debt forever!
I hated being in debt. It just was not who I wanted to be. Once you realize you cannot build wealth until the debt is gone, it helps tremendously. I hope the steps above are useful to people on the debt elimination path.
Submitted July 06, 2018 at 11:45AM by fiintrovert https://ift.tt/2KVdKeO
