Get Out of Debt: Give Up Your Favorites

by Kevin on April 23, 2009

So you say you want to get out of debt, eh? You are tired of making payments. You’re tired of people calling you asking you to make a payment. You can’t sleep. Work is weighing you down.

You want to get out of debt.

But looking around your place I see all kinds of expensive things. What gives?

How Much Do You Want to Get Out of Debt?

Seriously. Ask yourself this. Are you taking your debt reduction that seriously?

Your debts aren’t going to just go away unless you file for bankruptcy and pretty much ruin your credit for the next seven years. Plus, you incurred them. You should pay them off. It’s the right thing to do.

Are you really serious about this task? It isn’t easy. You’ve made dumb decisions.

  • You bought too much house.
  • You bought an expensive car brand new off of the lot and financed the entire purchase.
  • You financed your home at 103%.
  • You can’t control your spending and are carrying $10,000 in credit card debt at around 20% interest.

The list of potential issues is endless. There are lots of people in this world that will gladly take your hard earned money.

But hey, we all make mistakes. I’m not going to hold that against you. You can’t change the past. But! You do have the power to control the future. You can pay off your debt and get that freedom.

So are you really ready? Are you serious about this task?

You Sound Serious, But…

I mean, you sound serious. I’d love to believe you. But I look around your place and I see a lot of expensive habits. A lot of monthly payment commitments and a lot of things worth money. Maybe these things make you feel good. Maybe you just can’t bear to part with them. They’re your favorite things on this earth.

Look at it this way:

  • That cable TV you pay for each month is extra debt payment money.
  • …the TV is also extra debt payment money.
  • Your expensive designer couch is cold hard cash waiting to be sent to your creditors.
  • Your cell phone and internet bills are all extra money to apply to debt.

This list could go on and on as well.

Do you see what I’m saying? If you were really serious — what Dave Ramsey calls “gazelle intensity” — you would ditch all of these favorites to pay off your debt. You’d sell the TV and couch on Craigslist. You would drop your cell phone and internet plans and pick up a pay-as-you-go phone (if you had to have one).

Your monthly commitments are likely killing you. Cut all them off except for the basic necessities.

Getting Out of Debt Sounds Hard

It sure does! You got yourself into this mess, remember? Remember what life was like before you had all of this stuff? You need to get back to that point, then pay off the debt, before moving forward.

It would really suck to have to cut off our cable, cell phones, and internet. (Especially the internet — hard to blog that way!) I am willing to admit that.

But if we were really in a dire situation with a pile of growing debt I would do it in a heartbeat.

I’m not saying you have to give up these things forever. Again, Dave Ramsey likes to say “Live today like no one else will, so that tomorrow you can live like no one else can.” That’s a powerful idea.

This entire week I’ve been writing about sacrifice. That’s the basic idea. Sacrifice today so that tomorrow (next month, next year, ten years from now) you can live a true life of freedom. Pay off the house. Save an emergency fund. Invest your money.

Live debt free.

But it all starts with getting out of debt.

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Garry - thisimprovedlife April 23, 2009 at 10:36 am

The past few months is probably the first time I have seriously thought about the debt I am in and I have started to get rid of it bit by bit.

You are right, it is hard and you have to be realy discipled to pull it off. I am getting rid of my overdraft of £2000 and I am about a third of the way through.

I think if you keep telling yourself you can do it you will win. Also the small visual tools that show you how well you are doing also helps. I use a spreadsheet that graphs how much debt I am in and it is amazing how powerful it is as a prompt to keep going.

Corporate Barbarian April 23, 2009 at 11:43 am

Debt reduction shares many principles with weight reduction. To lose weight, reduce your eating or increase your exercise. To lower your debt, cut your expenses or increase your income. It’s very simple. People are always looking for a magic pill that doesn’t exist.

Ricky April 23, 2009 at 3:29 pm

Getting out of debt is hard, there is no doubt about it! Not long ago I could have been accused of being addicted to cars and the payments to go with them. I was always looking for a way to trade cars and roll negative equity into a new loan. Which is just DUMB. But as of this past March I have no car payments for the first time in 6 years. I will never have a car payment again, and no new car with a payment book to go with it can compete with that!

MoneyEnergy April 24, 2009 at 12:07 am

Nicely put. I personally think bankruptcy for most individuals is a very unethical choice: it amounts to stealing all those goods and services you bought on credit. And getting out of debt is sacrifice, true: you have to pay TWICE as much as the costs of what you bought. So might as well take it in advance by SAVING first.

Golfing Girl April 24, 2009 at 7:47 am

Thank you for not sugar coating it. 95% of the time the reason for debt can be traced back to poor decisions. (Yes, I realize there are medical problems and such that account for the other 5% but I’m not talking about those.)

And DECISIONS are the same reason you’re not getting out of debt. You chose to upgrade to the nicest cell phone or you can’t bring yourself to chose a life without the NFL Sunday ticket, etc.

It’s about taking personal responsibility and making choices that are in sync with your goals.

Kevin April 27, 2009 at 9:04 am

@Garry: Visual tools are great. Heck you don’t even have to use a spreadsheet… pen and paper work. For those in the US, the good old United Way thermometer that shows the level of donations can be used in the same manner.

@CB: It definitely does mimic weight loss in most instances. Dieting doesn’t work. Permanent life change does.

@Ricky: Good stuff man. Imagine paying cash for your next car. How awesome.

@Money Energy: Yea it’s like saying, oops, I can’t afford the excesses of my lifestyle. But I still want to keep everything.

@Golfing Girl: Personal accountability is pretty much lacking from our society these days. All of this traces back to that… and those decisions that have been made.

Tammy Brackett April 30, 2009 at 6:10 am

Insightful post and emphatic too!
The debt issue I’m chipping away at is underearning. Not many financial folks talk about underearning as a cause of debt. Being in business for myself was not profitable and I unwisely used credit for phone bills and groceries during hard times.
I no longer use credit cards and am working to pay them off through side hustles and extra income from selling plants, yard sales, and taking any extra work I can find!
Thanks for a great site and thoughts.

Yo Prinzel April 30, 2009 at 11:25 pm

I think you raise an interesting point about the amount of people who profess to long for financial freedom but really seem pretty comfy in their debt. Hopefully they’ll see the light someday!

Kevin May 3, 2009 at 1:36 pm

@Tammy: I try to address earning more money, but at the end of the day cutting back is almost always an option. There is generally something someone doesn’t want to give up.

That having been said earning more money is always an option. The more the merrier.

@Yo: Thanks!

Tammy Brackett May 3, 2009 at 3:55 pm

Hey Kevin! I was frugal before it was hip so cutting back, cutting out and cutting down is ALWAYS happening!
I reduce, reuse, recycle nearly everything in my environment. Shop at thrift marts, cook at home, etc. This REALLY works to reduce my expenses. It’s funny how hip and happening it is to be frugal in 2009!
I really enjoy your site Kevin. Keep up the fantastic work!

Kon Sama March 16, 2012 at 8:48 am

On September 2011 I made the commitment to payoff my credit card. I owed $7,500 and it was 100% maxed out. I started making $50 payments every week. On January 2012 I called the bank and asked if the interest could be lowered and they looked at my history and agreed. It went from 13.9% to 8.9%. I continued to make payment as much as I could. Today I owe $4,600 and have projected to ay it off on May 05 the latest.
Another commitment I made was to start an emergency fund. I called the bank and requested a Money Market Certificate of Deposit with an amount of 50 to be deposited every month, Is not a lot but now I have $300 on savings in case an emergency happens.

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