One of the keys to getting out of debt is focus — and that means putting your money where your mouth is.
In other words, if you want to get out of debt in a timely manner, you’ve got to throw money at it.
You can’t just talk or daydream about it. You’ve got to do it.
Take a good hard look at what you’re really spending your money on right now, and figure out how you feel about it.
Start with a reality check
Do you chat about being debt free while you’ve ordered dinner out for the third time this week? If so, take out is your real priority.
Have you taken three vacations this year? Travel is what you’re really interested in.
And there’s nothing wrong with any of those things — if you have the money. But you need to know what your real priorities are before you can make adjustments.
Once you’ve given yourself a reality check, it’s time to decide where you want to make changes.
What’s most important to you?
If you really want to get those debts paid off, it’s time to cut back on some of your spending, earn extra money, and focus on becoming debt free.
Sure, you will accomplish that eventually if you just stop borrowing money — assuming you don’t have an interest-only loan — but it’ll take a whole lot longer.
You’ll get out of debt a lot faster if you actively concentrate on knocking it out.
Note that focusing on debt reduction does NOT have to mean giving up all the things you love and living like a monk. But it does mean you actually have to send extra money to your debt on a regular basis.
So go ahead and get what you want most, while you adjust your lifestyle to be in line with what matters to you.
Decide where to cut back
How do you know where to cut back? I’d suggest not eliminating the things you actively enjoy doing. That’s because getting out of debt is nothing like going on a diet. Or at least it shouldn’t be!
Getting out of debt is more like getting healthy. You’ve got to make the way you live a permanent change. Cut out the things that don’t actually matter to you (maybe you don’t watch some of those premium channels, and could get a better deal on the ones you do?) and leave in the things that do.
Shape your life to be the way YOU want it to be. For good.
How we did it
For example, we continued traveling while we were paying off our house, because travel was super important to me.
But we only spent money we already had. We also cut back on things that didn’t matter to us, got raises, side hustled a lot, and worked extra to continue sending big chunks of money to our mortgage on a regular basis.
Once the end was in sight, we did cut back on the trips too, because we wanted to be completely debt free even MORE. And it was totally worth it. (It helped that we knew there were big rewards waiting for us when we were done.)
Why it works
Making debt freedom a lifestyle change works because when you’re all done, you end up with the life you designed along the way. Not the old life where you’re stuck on a hamster wheel of debt, working to pay extra for every single thing you buy and do.
You’re left with FREEDOM.
The freedom to continue doing what really matters to you, because you’ve worked that out along the way.
So what’s important to you? Is it being debt free? Then put your money where your mouth is. Remember, debt is absolutely not forever.