The word "debt" usually invokes a negative response when you hear it. It’s true there is good and bad debt. However, the road to ruins is sometimes paved with good debt. The quicker you can get out of debt, the quicker you can use those ducats to invest in your future. I can hear the pitchforks sharpening but I’m going to just say it: “debt-free is a myth”. As long as there is electricity, gas, cell phones, property taxes, personal taxes, etc., you will owe someone. Do not take this as thinking you have carte blanche to run up all kinds of debt. My personal philosophy is to strive to be free of the biggest debts, the ones that tend to be the biggest millstones.
Now that is out of the way, let’s get real about debt and how to tackle it.
I don’t have a “I paid off 100k of debt in 30 days” story. Compared to some, my debt levels were low. However when you owe a grip of money and the balances never seem to get lower, ANY amount of debt seems insurmountable. I ran up a bunch of credit cards, tried to fix it with a horrible debt consolidation loan, got laid off, and you see where this is heading. I was in my late 20s owing all kinds of money. I had to humble myself and move in with my sister (thank goodness for her generosity) while I pulled myself out of the financial doldrums.
Once I re-entered the workforce, I knew it was time to get to work on my debt. Instead of popping the champagne when that first direct deposit hit, I sat in deep thought. I realized I have to get a handle on this. I have to get out of this hole that I dug myself into.
- I sat down at my computer and tallied every piece of debt I had. Trust me, that was hella scary but I had to know what I was facing. I plugged those numbers into a spreadsheet and to see it in print was staggering. You got to do it though. Only debt I recommend not putting in this list is a mortgage. If you’re not living in it, list it.
- Identify the behaviors that landed you in debt and eliminate them. When we think of debt, we automatically go to the major ones: student loans, car loans, credit cards. These are types of debt. You have to dig deeper to find the behaviors. Example 1: you have a perfectly fine television, MegaBuy has a newer tv on sale for $500. You charge it. Example 2: your homie who makes way more ducats than you invites you out to Charchez LaGhost for their renowned $200 prix fixe meal. You know you ain’t got it, so you swipe swipe. And not to be outdone by your ballin’ friend, you make sure you stunt properly. Example 3: your cousin has called for the 5th time in 4 days asking to borrow money. Most times $20 won’t put in on the road to poverty, BUT folks will $20 you into broke. You got to start saying no. **Full disclaimer: I’m still working on this, but I’m better now. This topic will be addressed in an upcoming blog post. Stay tuned.** I was a bit of 1, a little of 2, and a whole lot of 3. In every instance, drawing boundaries and saying NO period and not NO comma made a world of difference.
- I’m cringing as I type out this section. I know it can read condescending and a bit flippant, but here goes: you have to find some more ducats. *dodges incoming shoes and tomatoes* Hear me out, I know the system is messed up. We all would love to stroll into SuperCorp and demand 6 figure salaries. For some this will work. For others *insert not realistic gif* You’re going to have to either cut expenses or increase income. When I was digging out of debt, I was fortunate enough to be able to do both. My girlfriend and I were able to live in her grandmother’s house so we saved a ton in rent. I also landed a gig that paid me more than I ever had made. My car was paid off and I didn’t run off to buy a new one. I found cheaper insurance. I would love to say that we stopped eating out, but the lie detector test would prove that was a lie. We did learn to cut back on the dining out. This won’t always be the case, but there are tons of side hustles out there. I’m a fan of side hustles instead of second jobs. Side hustles tend to be a little more flexible. Quite a few are work from home. There’s always the option of starting your own side business. Blogging *winks*, resume editing, dog walking, house sitting, professional cuddling, let your imagination roam free. If you choose this route, be sure to choose something that has a low associated costs.
- Get started! Once I located the extra ducats, I started putting them to use. I’m a person who likes to win. I knew I’d get satisfaction from paying things off, so I paid smallest debts off first. Next I managed to score a better debt consolidation loan. The rate I got was more than half of the one I had prior. This saved me a bunch of money in interest. I continued to drive my “beater” and managed to not incur any more debt. One thing I did not do is cancel my credit cards. I highly suggest not closing cards. I know it’s tempting but it only hurts your credit score. Cut them up, freeze them, hide them, whatever, just keep them open. I also started working smarter and managed to get a promotion.
As of article date, I only have two debts: my mortgage (which I am aggressively paying off) and my car (after 12 years, I decided it was time). I could pay off the car but at such a low rate, it’s not worth tying up money. It took me a long time to unlearn bad money habits. It took a while to see those balances go down to zero.
I wish I had a magic spell that you could cast on your debt and it disappears. I wish I had something more to offer than “make more or spend less”. I don’t want to be one of those bloggers who are flippant and advice comes off as “just stop being poor”. Truth be told getting out of debt is hard. It’s hard mainly because we are creatures of habit. It’s hard because some of us are caught up in the capitalistic machine that keeps our wages low and our debts high.
Even still we cannot let debt overtake us. Debt causes stress. Debt keeps us from obtaining goals. Debt keeps us from living our best financial lives. Debt has to be conquered. Debt can be conquered. The journey to victory against debt starts with honesty and transparency. If you’re feeling like you’re drowning in debt, don’t despair. Commit to getting started on the road to tackling your debt. Go slow but don’t stop.
Duc-hunters, do you have any get out of debt stories? Any tips for people struggling to get out of debt? Need a space to just vent for a second? Hit that comment box.