Removing debt involves removing the causes of going into debt. We go into debt because we demand immediate gratification of our human desires. Debt empowers us to get something we want now, rather than later.
However, it puts us in slavery to the person or organization we are indebted to. Many Americans go through life enslaved to debt. They accept it as a fact of life, and do not have the financial freedom they could.
Your decision to be set free from debt requires identifying your underlying desires that are contributing to it. An example might be a car loan. You borrow $30,000 because you have to look good and be comfortable in your daily commute. Is this really necessary? All that you really need is to go from point A to point B. Is it really worth borrowing year's worth of money to brush up your ego a little for 1 hour a day?
In the car example above, how could you get a ride that you enjoy without borrowing immensely for it? The key word is prioritization. What do you actually have to have in a car? Something that gets you from point A to point B reasonably safe. Try not to add much more than that besides cup-holders. You then have your pick of cheap and used vehicles that are fairly efficient to choose from. Your friends might laugh, but they are still in debt, and you are not.
Avoid Scarcity Prejudices
Eliminating debt requires eliminating scarcity prejudices that are guiding your actions. Prejudices like, "I have to do what my friends are doing." Another might be, "I have to get exactly what I want exactly when I want it." These prejudices are irrational, and they are hurting you in the long run. The toddler that screams for 10 cookies immediately becomes fat and sickly. The toddler that spreads their 10 cookies out over a month is healthy and happy. You have to learn patience and discipline if you want to be free of debt.
A lot of people do not like to hear direct warnings about their personal issues. They find it insulting. Refusing to learn, however, has drastic consequences. The fat man who keeps borrowing money on his credit card to buy potato chips is dooming himself to a lifestyle of a bloated waistline and a bloated credit line. It is easy to see the problems that other people have, but examining our own issues is very important.
Small business bookkeeping methods can help you and your organization or your family. Set up a piece of paper. Have a column for debts, or income. Have a column for credits, or expenses. You should be balancing both columns.
Be Honest With Yourself
Use the SWOT method. Examine your strengths, weaknesses, opportunities and threats. This tool used by strategy specialists can help you uncover your blind spots that are putting you in unnecessary financial dilemmas. Using the SWOT method requires honesty. Some people are afraid to see what scares them. Be brave, and figure out what is going wrong. It can transform your life.
Enlisting professionals can help you as well. There are many competent people out there who have gone through this journey before you. Many are willing to guide you in areas where you feel concerned.
Another thing to do is to budget your expenses. What will you absolutely need to be buying? Have some extra money for fun activities. Do not twist your budget to make it do what you want. Abide by your budget. Budget planning can make you a more focused person who is more careful.
Another great tip for eliminating debt is getting accountable. Compete with your spouse or friends to eliminate debt. Set targets for your group to meet. You will find that being on a team encourages debt elimination. You can all buy pizza with cash when you are done, grinning at the credit card fanatics next in line.
Lee Flynn is from the Wasatch Mountains near Salt Lake City, UT. After Lee spent years preparing himself, his home and his family, he decided he had to do more. In his free time, Lee helps educate those who want to do the same. Through small local workshops and articles, Lee trains and teaches others on home preparation, food storage techniques, wilderness survival and self reliance. After obtaining a bachelors degree from the University of Utah, Lee moved to the Salt Lake Valley where he now lives with his wife and daughter.
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