4 Simple Rules that Helped Us Pay Off Over $147,000 in Debt

By Jackie Beck   Updated 06/07/2021 at 5:47 pm

When we were getting out of debt, instead of agonizing over whether or not to borrow money or being tempted by something great that we couldn’t afford, we made things crystal clear by creating a few rules to live by.

We wanted to be debt free, so why invite debate?

It’s easier to stick with some helpful rules until the new way of thinking becomes a habit.

Here are 4 simple rules that helped us pay off over $147,000 in debt — including our mortgage.

1. The “Hot little hands” rule

If I want something, I need to already have the money in my hot little hands before buying it. That means I only spend money I already have.

This one is paramount. It’s rule #1 for a reason. No excuses. No “but I’ll have the money on Friday” or “But this is such a great price!”.

I either 1) have the money, 2) don’t and figure out a way to deal, or 3) wait until I do.

If I do already have the money, it can’t be earmarked for something else, unless I’m willing and able to give up or delay that other thing. If everything is a go here, I move on to the next rule.

2. The “Is it worth it?” rule

I have to want what I’m considering buying or spending money on more than the other things I can do with that money. It has to be worth it to me.

That’s why I happily spent more than $10,000 on a trip to Antarctica, but I balk at spending $6 for a burger when I can get one that tastes better at In-N-Out for about $2. It’s why I don’t mind staying at cheap motels when traveling (since I’ll barely be in the room anyway), but will pay $80 to be a member of a garden I want to support instead of just going to it for free. The things I do buy or spend money on are worth it to me.

I’m grateful that I can make those kinds of choices now. Really grateful.

(The next two are specifically about impulse spending. If you’re not impulsive, just the first two rules would probably do the trick.)

3. The “But wait” rule

Many purchases are spurred by advertising or by noticing an item in a store. I’m especially vulnerable to advertising I hear on the radio.

So when I catch myself wanting something, I ask myself, “Wait, did I want this or even know about it before now?” Almost always the answer is no.

My thinking is that if I didn’t want it before hearing or seeing an ad for it, I must not have wanted it all that badly, so I may as well move on to thinking about something else instead. Usually about 30 seconds later, I’ve forgotten all about it. If the potential purchase keeps coming to mind in later days or weeks without the help of a repeat ad, I go back to rule #1.

4. The 24-hour rule

This one is great for allowing thought (or forgetfulness) to override emotion: Wait at least 24 hours before making any unplanned purchases.

And while you’re getting out of debt, consider delaying planned purchases too if they’re not all that important. Fun planned purchases make good rewards for reaching milestones in debt repayment. (Like, “Once we pay off the credit card and have saved up for it, we’ll take a vacation.”)

When we were in the homestretch of paying off our mortgage, we delayed replacing a broken doorknob on the door we used most. Sure, we had the thirty bucks it would have taken, but I could just taste the freedom coming our way. Sending it to the mortgage felt even better. Every single time we went around the long way to the garage instead, I thought about how great it would feel to live in a paid for house.

Make it easier

Using these rules makes decision-making easy, and keeps your goal of debt freedom front and center. They also help create the habits that will keep you debt free once you get there. Give them a try and see what you think :)

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Want to be debt free? It's easy to stick with some helpful rules until the new way of thinking becomes a habit.

4 thoughts on “4 Simple Rules that Helped Us Pay Off Over $147,000 in Debt

  1. These are really great rules to follow, I especially like the “but wait” rule. I’m so naturally forgetful, that one should work really well for me.

  2. Great rules! The one that resonates most with me is the “is it worth it?” rule. My husband and I are working on paying off $117k of student loan debt in three years. We are currently on a three year spending ban. During this time, I’ve spent a lot of time thinking about what things I miss spending money on and what I don’t miss. I don’t miss spending money on clothes or useless stuff, but I do miss spending money on valuable, fun experiences.

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