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“Emotions get a hold of us, and we as investors, tend to do very stupid things” Princeton University Economist Burton Malkiel, p. 17 “Unshakeable”-Tony Robbins
We all want to be financially independent at one stage or another. Some of us who were once there, and didn’t do so well at staying there, can really find these tips helpful in order to get a fresh perspective on debt.
If YOU want to get ahead, be debt free, and start investing to realize ‘Financial Peace’, don’t do what I did in making these 3 mistakes 🙁
First one should be a no-brainer but sadly folks do this a lot, including me.
DON’T FINANCE A CAR
I was completely debt free three years ago with 2 paid off cars that were old but decent, by decent it meant it got us from point A to point B without any hassles, and if there were any since they were Japanese cars, they were easy to fix and not expensive to maintain.
Well, almost 2 years now I’ve gotten a raise and felt pretty good about my financial outlook, so what did I do that you shouldn’t? Glad you asked..
I donated my older car and, you guessed it, financed a newer luxury vehicle since I felt like I deserved it 🙁 stupid mistake that I now have to live with for 4 more years, yes since it was a 6-year finance term.
So lesson number 1, if you don’t need to, your car is absolutely working, please don’t give in to the voices that say ‘you deserve it’, coz if you’re like me, trying to pay off a six-figure debt load, you can’t afford it.
Instead, cash flow it by saving what you would’ve paid monthly on for on a car and then when you reach your goal, however much the car is worth, then you can take the cash and pay it off outright.
Don’t feel the need to ‘celebrate’ a $500 raise, with a $650 car payment, it’s just stupid and counter-intuitive … don’t do what I did 🙁
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The second mistake that I’m also ashamed to admit that’s equally simple but hard to stay away from is….
DON’T GET INTO CREDIT CARD DEBT (AGAIN)
If you’ve been debt free, at some point either by paying off or via the hard way, BK; don’t make the boneheaded move to get back into it, like I did.
I read a study that says in 2015, credit card companies sent out a staggering 3.2 billion mail offers for ‘easy credit’. If the current population in the US is only 327M, then credit card companies send out 10 offers to go into credit card debt per person per year.
And as it currently stands, the total household debt in the US is now at 13 Trillion, that’s with a ‘T’. Whatever these credit card companies are doing to get us all hooked, seems like its working.
So If you’re like me who eventually get suckered into enticing loan terms, let me remind you to stand firm, tear up these junk mail, and DON’T DO IT!!! It’s not worth it. You will easily end up in a debt hole like me and will find it hard to get out, however well-intentioned your reasons are.
There’s never a good reason to be in credit card debt and be enslaved to big business.
And last but not least…
DON’T BUY IMPULSIVELY
Oh yes, ‘emotional buying’ is one of the dangers of an ‘I want it now’ society.
The value of waiting has since gone the wayside with the influence of ads and slick marketing campaigns.
Society, in general, is now bombarded with media that tries to influence everyone to buy, even if they can’t afford it, and along with it, peddle credit card and easy money loans that result in the majority being shackled with debt.
Contrary to what most of us think, we ‘DON’T DESERVE’ stuff ‘just because’, especially when we can’t afford it or are straddled with debt.
I know it sounds harsh but that’s reality. If we want to be financially independent, free from encumbering debt, we all have to learn an old English word that has since lost its popularity, that is ‘WAIT’; this comes in handy with another old English word that is seldom used now, which is ‘NO’.
Waiting and saying NO can do wonders to our finances.
I know it all sounds depressing but Wait. THERE IS HOPE. No one has to be trapped or be helpless.
First things first, STOP.
Realize the situation, and DO SOMETHING ABOUT IT.
Here are 3 things that can help you do just that.
INCREASE YOUR MARKET VALUE
Whatever your job is, or however you make money, you have value and create value.
Think about what you’re good at and take steps to increase your value to be able to increase your income.
A good reference point is Glassdoor. From here you can research your market value, or jobs that are in demand with their corresponding salaries. You can then take steps to get educated, there are free courses from Udemy or if you’re in IT, through Cybrary, as examples. Then take steps to learn on demand skills that can later translate into pay increases or better, bigger opportunities with other companies.
I remember when I was slaving away for two years trying to earn my Master’s degree. At that time, in 2008, the economy was looking bleak, seems like I was always tired, and the work seemed endless. But two years after, when I graduated, it all seemed like a blip and I ended up being better for it. I managed to get a raise, promotion, and fast forward eight years in, it’s still earning me dividends.
My encouragement to you is, NOTHING is impossible if you have a can-do positive attitude and are willing to put in the work to better your situation and eventually fight your way out of debt.
MAKE AND STICK TO A BUDGET
A budget is simply a financial plan.
Much like companies at the start of every fiscal year figures out what their income is versus what they owe; a ‘WRITTEN’ budget is just that, it’s our household financial plan that states how much we make versus how much we’re paying out to debts and household bills.
There are a lot of great tools out there but my personal favorite is Every Dollar the free version. It’s simple to use and the app works both for iOS or Android phones, or you can use the web version.
By tracking all your debts, figuring out your monthly dollar spends, and sticking to it on a plan; It will not only help you get out of debt, but will also be an eye-opening experience that will cause you to re-assess where exactly your money goes and where and what to change.
By doing this simple step, you can set yourself and your family to a better financial future.
BE OPTIMISTIC
However dire you think your current situation is, please understand that there are infinitely more people out there that have it worse than you.
If you woke up today, with the same set of eyes, number of limbs, can walk, breathe and function normally, you are a walking miracle.
Statistics say that on average 7,518 people never even get to wake up each day, and countless others who do wake up, stare at their hospital bed, jail cell, wheelchair, dirt floor, you name it.
Bottom line is, we still have potential, the sooner we get our minds off our situation and onto the infinite potential and possibilities out there, the better we’ll be.
Simply put, whatever we ‘WILL’ our lives to be, is what will happen, so my suggestion is to get off our mope machine and get on the positive train to Success, whatever that represents.
TO WRAP UP
I really can’t believe the hole I’ve dug myself into, but like I mentioned above, there is hope; there is endless possibilities, What eventually doesn’t kill us, teaches us, and makes us strong.
So, by steering clear of the top 3 don’ts and focusing on the 3 do’s, I believe we can all look forward to a better future that is debt free and filled with infinite possibilities.
Do you have other tips that can help us with our debt free journey, please do share by commenting below or emailing us at thedebtfreejourney@gmail.com
Until the next post…
Peace and Blessings to you All.
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