Posted by Tim Stobbs on May 4, 2011
Debt is so ingrained into our everyday life that most people would consider it almost unusual to meet someone who is completely debt free. No mortgage, car payment or even a line of credit. In some regards, life after debt sounds a lot like life after death…it sounds good, but until you see it, it is a little hard to believe in.
While I’m not debt free yet, I have made a lot of progress to becoming debt free. It hasn’t been easy road to travel, since too often the lure of new goods can pull you back off the path (for example: ebook readers, new surround systems, or shoes…depending your particular vice). Perhaps that is why life after debt is hard to understand for some people as once you achieve that level of success the results are invisible to most people. Being debt free in some regards would often result in you looking poorer to others as you tend to drive an older car and live in a modest house.
Often the accumulation of debt is a direct result of a desire to compete with others. In an attempt to keep up with the Jones, we buy the newer car even if the old one was fine or get a kitchen reno even when we don’t cook that much in it. In some regards being debt free is the exact opposite behaviour as you often can’t be in competition with your neighbours since you don’t know what their debt levels are at and may in fact never know. So be choosing to go after being debt free you exchange an external competition for an internal one. While some blogs like this one, do you give you an idea of others debt loads often the comparison isn’t correct because of geography, income or even goals. So in the end the desire to move past your debt is a battleground that solely exists in your head.
So how do you compete against someone who knows your every move before you do it? You have to main weapons to defeat yourself and your debt: logic and emotion. The logic side is the one most people are familiar with, as it includes budgets, monthly saving targets and spreadsheet plans full of numbers. If logic worked by itself everyone would be rich since it would be easy to plan or even have someone help you plan your way out of debt. Yet it doesn’t work that way, since far too often the emotion side gets in the way. Emotion is a fantastic way to over ride logic as the ‘right‘ way to go ‘feels‘ that way, regards of the fact the numbers are saving: you can’t afford that.
Yet since we can’t get rid of emotion, you must instead try to accept that and then use it as best as you can to support your logical plan. This is where you start trying to get your mind to work with you by the oldest trick in the book…you bribe yourself. Do not under estimate how critical rewards are to changing and enforcing behaviour, but in the end it won’t be enough. You also have to make the behaviour easy to do and make the wrong thing hard to do. So how do you do that? Here is an example, you could set up automatic payments to your debt so you don’t have to do anything to pay it off. Then you also setup a few points in time where you reward yourself for paying off debt and even have a bonus reward if you get it done faster than the plan. Last, but not least, you leave your credit card at home and keep your limits on your debit card low so you can’t get back into debt easily. While doing all of this may seem like over kill, that is the point. Your playing poker here with someone who knows your cards…you only hope to win is massively over strategically plan for that fact.
So now that you are armed, go out there and slay that debt. Your opponent is a little to smart for their own good, so be careful for their tricks or you might end up in a cave clutching your gold card and calling it ‘your precious’ between rounds of saying ‘charge it’ at the mall.’