Just because your debts are massive does not mean you cannot pay them off quicker than you think. Just because you have many high balance loans does not mean you also cannot pay them all down quicker than you had planned. The truth is we are conditioned to think that this is impossible. We also as Americans have the bad habit of not only taking on debts but stretching out the terms of these debts to the longest possible in exchange for a lower monthly payment but higher overall interest. We love to pay the minimum on your debts and at any turn we seem to love to stretch out the debts to even longer periods. It has become normal in America, but just because something is normal behavior does not mean it is correct behavior or even right.
You can take steps today, this week and over the next months and years to empower yourself financially. Becoming debt free is totally possible, so long as you’re willing to do whatever it takes to make it happen, and this does not mean you cannot have a good life while doing so.
Keys to transforming your life and removing and wiping out debt:
Change your lifestyle:
Do not fund your life style on credit. Mortgages and auto loans and student loans are things we need in life, but we do not need to put $120 dollar dinners on credit cards or take out personal loans for a vacation. Frivolous loans and credit card charges come with high interest, and even if the interest is low its still diverting resources away. Focus instead on paying down existing debt while also building your savings account up. Be as resourceful and creative as you can along the way.
Scale things up but start small:
You do not need to make big moves forward, you just need forward inertia. You can for example pay an extra $50 per month on one debt, and then next month maybe scale it up to $75 per month. Everything starts off small but can snowball into a force to be reckoned with. Enjoy small victories and once you relish in them proceed onwards to taking bigger steps.
Any extra income during this time should be moved to your goals, be it paying down debt or building up your savings account. Resisting the urge to spend away extra income that you did not expect, such as for example making $1000 selling of old personal possessions on eBay you should divert those funds towards your goals.
Take your time and be patient:
Nothing happens over night. Most people derail by expecting to much to soon. Progress is small steps towards your goal that when taken as a whole look huge, the thing is that it was all the small steps along the way that made people reach the goal line.
You should know where every single dollar is going. Every dollar you have should be put to work. Pay for everyday things with cash only and do not use you credit cards unless for extreme emergencies such as needing roadside assistance or a burst pipe in your home that needs immediate attention. Leave a little breathing room in your budget say $50 to $150 as a cash cushion.
Needs and wants and knowing the difference:
We all have needs, shelter, clothing, food, some entertainment. Yet here in America we are often prone to temptation and impulse spending, often living beyond our means. Ask yourself before making that purchase if you truly need it or not. This is not to say that you should be a scrooge either, in fact you should budget some fun money to make life worth living.
You can be an American success story and eliminate debt, obtain a high credit score and live life fully while doing so if you have a little patience, commitment and fortitude to get it done. It is not as hard as it sounds, you only need to want it to happen. After you are debt free you could easily save up a large chunk of money in just 5 years. I have seen people save $100,000 or more in just 5 years time.