Some things seem overwhelming. Debt stress is one of those.
Earlier this week our son’s baseball teammate was completely defeated up to bat. He literally told me he didn’t believe he could hit the ball. It was all we could do to just get him from jumping away from each pitch. To just hang in there through his turn.
Then, while spinning away from the pitch yet again, his bat accidentally hit the ball. Just that slight bit of (foul) contact visibly injected him with batting confidence. He proceeded to foul off three more pitches- more batting contact than he’d had the entire season.
What changed? Nothing.
Except his overwhelm was busted by the simplicity of bat to ball. So simple it can happen by accident.
Debt is the same way. We can discuss all kinds of scary, evil stories about debt… blah blah blah. But this isn’t that kind of post. This is for those of you who feel overwhelmed and stressed out figuring out how to deal with your debt. Those of you stuck and getting nowhere. Asking all the questions. How much? When will it be gone? What if I can’t…?
Here’s the thing. Debt is not a part of your soul. It doesn’t define anything to do with you as a person. And you’re not alone.
Ultimately, your debt is just a number, that’s it. Managing it is math, that’s it. (Yes, math, like debt, is a four letter word to many, but hang with me.)
Speaking of math (simple math, I promise!), grab my workbook below to get a smarter, simpler money strategy started for yourself.
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Lover & haters: the multiple views on debt
Though many fixate on the negative aspects of debt, there are also many people who know debt is just another tool in the toolbox. Manipulated wisely, debt is a useful way to invest in oneself or advance your life in ways that pay dividends later.
Though you can find a million articles on paying off your mortgage to save on mortgage interest (including my own), there’s another view. For instance, mortgage debt is about the lowest interest debt you can get. Many folks will refinance their mortgage to stretch it out longer, borrowing at low rates against their house, in order to free up cash to put into the financial markets. Those markets generally have a higher return than the savings gained by paying off a low-interest mortgage in the long run. This can be a smart move as part of a diverse, long term financial plan. Yet these people aren’t experiencing debt stress, even if maybe they should be!
Likewise, student loans used to earn a higher education can feel suffocating at graduation. But that education enables you to have decades of higher earning potential, even if it doesn’t seem so right out of the gate.
I make these points not to encourage you to run out and grab up some more debt. But just to illustrate that nothing is so black and white. It’s time to take the power out of debt. Chill out the rhetoric a little bit. Debt is not a moral failure. It’s a contract. And it’s pretty much normal. Everyone has it, for better or worse.
Just gotta take a step back and put things in perspective to relieve the stress that debt can cause. There are worse things in life than debt. And, though it may not seem like it, debt can be solved. There is a path forward.
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7 steps to get rid of the debt causing you stress
Step 1 – Take a pause
Take a deep breath, my friend. Find a mantra that minimizes the threat of debt for you. Maybe something like “Debt is just a number” or “Net worth is not self worth.” Or find some other encouraging gems here. Repeat daily.
It is important to never let money have power over you.
Step 2 – Set aside the noise
If you’re stressed by a pile of debt, you might have a lot of static in your mind over it. How long will it take to pay off? Should I consolidate my student loans? Is my credit score high enough to refinance? Should I even refinance? Should I do a balance transfer? Maybe I need to hire a debt relief service. Where do I start? Etc. Etc.
Just take that pile of well-intended, unanswered questions and set it aside. Stuff all your problems with debt onto a high shelf for the moment. You might have a ton of really good ideas and questions about creating a plan to get out of debt. But sometimes perfect is the enemy of good. Analysis paralysis is blocking any progress. Just take an intentional break from thinking about it. What you need is that accidental foul ball. Any small progress to get unstuck.
Step 3 – Pick 1 (one, only one) account to target
With your pile of complication set aside for now, pick one debt to focus on. Your choice. Ideally the smallest, easiest one. Or the one you feel most positive/motivated to handle if you believe that is best.
Pick that account, just a name and a number. That is now the only debt that exists. Write it all by itself on a spreadsheet or notebook page.
This debt account is now your sole target. One measily little debt to attack. Meanwhile, you continue whatever you were doing with the rest- making the minimum payment, etc. And continue to set aside the overwhelm, doubt, and debt stressing.
Step 4 – Attack
During this precious time allowing yourself to set the rest aside, put your thought and energy into freeing up any money you can to attack this one and only debt. Start slow. Maintain a cool calm head. But take whatever steps you can to pay off this debt.
Start with one strategy, then add another. Perhaps each month or week you add one more strategy to free up more money for this debt repayment. When you’re ready for these strategies, use tips #3-7 in this post to give you ideas for freeing up money to use towards your debt payoff goal.
Ahhh, one silly account. And a fresh, calm you. Forget it, this debt is toast! Whether it takes a week or a year, you are moving in the right direction. And that’s all you need to do to conquer debt over time.
Step 5 – Maintain
Keep doing what you’re doing. Maintain your new strategies for redirecting money to pay against debt. Adjust your strategies as you need to keep a sustainable flow of cash towards your debts, whether it’s $10 a week or $1,000. Find what works, keep refining your actions to keep it going through the ups and downs.
Debt payoff is simply a matter of time if you maintain some consistent level of cash flow towards debt repayment. Eventually that first easy account will be paid off. Major victory dance!
Step 6 – Rinse, repeat
That’s it. You have accomplished the one and only thing that matters most in a debt payoff plan. And that is simply to free up some cash and consistently pay it against your debts.
Now with overwhelm and debt stress at a minimum, it’s time for the fun part. Remember that pile of debts you gave yourself permission to set aside at the beginning? With your newfound confidence, pull that pile out and start a list. It doesn’t have to be every last detail at first, but atleast start the list. List your debt accounts with the current balance and interest rate.
With this information, you can pick debt target #2 and simply repeat the process you already took. Pick the smallest, easiest total balance again. Or if there’s another one you’re passionate to eliminate, go for that one.
Then just simply use what you were paying each month towards that first debt payoff (that’s now gone!) and add it all to what you’re currently maintaining on Target #2. That should be a nice boost to kickstart the second debt payoff with no additional strategies needed to free up any more money in your usual cash flow.
Step 7 – Refine your larger plan & carry on
With progress in motion, it should now be much easier to set up a more comprehensive plan to deal with your whole debt picture. Visit my post on organizing your debt to pull the necessary info together. And get my spreadsheet template emailed to you now using the form below, which includes a debt plan template, to get all the necessary details in one place.
And with forward progress ongoing, you can then take your time to revisit potential improvements on your strategy that are a bit more ‘involved’ like getting educated on debt consolidation options, calling credit card companies to lower your interest rates, etc. But don’t let these things keep you from just starting.
Keep refining your plan as life evolves. Whatever the ups and down, keep your ninja debt repayment plan flexible and forward-moving. With consistency and persistence, it’s just a matter of time. Remember, it doesn’t have to be perfect. It just has to be inching ahead. You’ll gain momentum over time and start feeling much better.
Key Takeaways
Thinking and worrying over debt constantly will bring you more harm than it is worth for your mental and physical health. Ultimately, debt is just a number, not who you are. Putting aside the overwhelming questions and uncertainty temporarily to start paydown on just one easy account on your list is the place to start.
Debt management is a one-at-a-time game. Follow these steps to get moving in the right direction while giving yourself some grace. With some forward progress, you will have the mental space to organize the bigger picture. And then it’s just a matter of time to kiss debt stress and money problems goodbye.
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