The Minimum Payment Trap: Escape it to Change Your Money Story

By Jackie Beck   Updated 05/10/2021 at 8:02 am

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Are you making minimum payments on all of your debt? If so, that’s absolutely better than not making those payments.

But just making minimum payments is also not the best idea. Why?

Well, let me tell you a little story — and then tell you about its flip side.

Picture this:

You drag yourself out of bed in the morning to go to work at a job that (if you’re lucky) is “ok”. If you’re not so lucky, it sucks. On the way to work, you fight traffic or maybe have car issues. Once you get there, you spend the day dealing with projects or situations that wouldn’t ordinarily be your life’s priority. Maybe you go out for lunch, spending money in the process. Maybe you work extra for no extra pay, because the company is short-staffed or you want to impress the boss.

Then you head home, tired from the day at work. You rush around, doing household chores, getting something to eat, and helping out your kids or other family members. Finally, you relax for a few hours doing something relatively mindless.

You want to do other things — the kinds of things you used to love doing once upon a time — but you just don’t have the energy. Then you head to bed, and wake up the next day to do it all over again.

Does that sound like a day in your life? (It sure used to sound like mine.)

Why not just quit your job?

Why not just quit your job? Or do something you’d enjoy instead?

I’ve asked people that exact question, and after they get done snorting with laughter, their answer is always the same: I can’t afford to.

There’s (really old) catchy song called Sixteen Tons that has this line in it: “Saint Peter don’t you call me ’cause I can’t go / I owe my soul to the company store”.

That song’s talking about something that a lot of people experience today, in a slightly different way. (Replace “company store” with “creditors” and you’ve got the gist.)

When you feel stuck

When the money you’ve got coming in is already promised to someone else — when years of your future earnings are promised to someone else — you’re under enormous pressure. You feel like you have no choice but to keep working to pay for the things you have. You owe, you owe, so off to work you go.

Ironically, a lot of the things you spend money on are things you feel you need to get to work. Stuff like a good car, education, appropriate work clothes, meals out, and entertainment to keep you going.

God forbid you’re not able to work any longer, or get laid off. Talk about stress.

According to the 2015 Retirement Confidence Survey, 28 percent of people surveyed said they have less than $1,000 in savings.

Less than $1,000.

You could extrapolate that out to mean that somewhere in the neighborhood of 41.6 million American workers have less than a thousand bucks saved up.

What if you changed the game?

Getting off the treadmill

Think about all of your payments for a minute. Maybe you’ve got a house payment, student loan, car payment, credit card, etc. Total up those minimum monthly payments and see what you get. (This is your Freedom NumberTM.)

Now ask yourself this: What if you didn’t have to make any of those payments any longer?

Could you live an enjoyable life on a whole lot less? A life where you’re free to do work that actually matters to you?

I know I could. And in fact, I did. That’s a HUGE reason that my husband and I paid off all of our debt. It took time, but IT WAS SO WORTH IT. Yes, I’m shouting for a reason :)

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My motivation for kicking minimum payments to the curb

I’d gone through a layoff where I ended up unemployed for 4 years. And I never wanted to be in that position again. I figured that if we didn’t have all those payments, we could live on a whole lot less.

We can, and do.

That’s why my day now typically looks like this 6 days a week:

Get up, usually before my alarm goes off. Eat breakfast, walk the dog, swim (in the summertime, otherwise walk longer). Work for a few hours. Have lunch. Work for a few more hours, unless I’d rather do something else. Hang out with my family. Do random things that interest me. Read, watch Netflix, play games.

It’s not that I’ve stopped working. It’s that I’ve put my focus toward working on things that matter to me: helping YOU get out of debt. And I am so glad to be able to do exactly that.

More importantly, I want you to know that you can to. It takes time to get out of debt, but it’s completely possible. Stick with it, keep your debt snowball rolling, and make YOUR life be something you love.

What if you didn’t have to pay those minimum payments, ever again?

Real quick, total up your minimum monthly payments and then spend a few minutes imagining what your life would be like without those. Go ahead, really imagine it. What could you do with all that money? Then take action by sending in a little extra today toward the debt you’re targeting — even if it’s just a few bucks — so you can make that dream a reality.

P.S. If you liked this post, share it with someone you know. It’s food for thought :)

Food for thought: What if you changed the game instead of spending your life just making minimum payments?

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