From the outside, I had a perfect life. I was doing creative work, starting a growing business, and had many interesting projects, along with enough income to pay my bills comfortably. Everything appeared to be going fine, and nothing was out of control. However, what was happening behind everything was that I was deeply in debt, and debt was controlling every aspect of my life. Every decision I made ended up being tied to debt. By paying my minimum payments, I felt as though there was no risk associated with the debt I had acquired, when in fact this was not true.
At 18 years old, I could do anything I wanted. I could have the biggest dreams, the biggest campus, and the biggest price tag. It was hard for me to imagine that borrowing money (debt) would ever become real. I assumed that I would never need to worry about my debt until later in life, and that I could deal with it at that point. I was underestimating how large the debt would be, with said debt/image interests.
The plan I had to get out of debt was straightforward; pay the minimum, run a successful business, and hope that I would eventually be able to pay the debt off all at once. That touching point kept being pushed away.
Debt does not just sit there waiting for you to figure things out, it just keeps accumulating and growing more rapidly.
However, the reason I was finally able to determine a suitable path out of debt was not because I created a spreadsheet; it was due to clarity. There were now to me; 1. A life built upon the weight of the debt I have (more debt); or 2. A well-constructed plan for my future to be free of debt.
Once I made this decision everything changed and fell into place.
Joint Forces, Join Together
Team member(s) are 100% involved in achieving goals, making similar sacrifices, and traveling the same path together. This creates an alignment that is much more valuable than any financial rewards.
Financial arguments end when money has specific directions.
No Beginning, Just A System
The single biggest asset was not income; it was the monthly budget. Each dollar was “accounted for” prior to the month’s start. Therefore, there were no surprises, and no wondering, “Where did my money go?”.
The money works the way you tell it to.
Why Big Changes Cause Painful Experiences
Scaling back your business makes no sense when you consider how much additional cash flow you will generate. This decision will cause you to give up things you feel define your status, and this may sting a little. However, watching your loan balances decrease will relieve some of that pain. Sometimes the way to grow is to cut back.
To Adapt Is To Survive
Snowball, avalanche, hybrid, all means nothing compared to the need to be consistent. The techniques used early in your process might not work the same later, and that’s okay. However, the ability to adapt to a different technique was much smarter than the ability to stay loyal to one technique without thinking it through. This is why personal finance is personal.
Moving. Starting a new job. Increasing total household income.. None of these events are accidental. All of these events have occurred due to the individual intentionally creating the life he/she/they wanted, rather than allowing chance and circumstance to dictate their life.
How to accomplish this: By setting clear goals, you create momentum that cannot be faked.
The ‘new’ car experience is extremely enjoyable and exciting. However, once the car payment comes due, the excitement of getting the car quickly diminishes. The process of downgrading from a financed car to a debt-free car is not enjoyable; however, having no car payment, and all the freedoms that come with it, is worth the temporary discomfort.
Chaos Will Change Everything You Planned
Then chaos happened. Income slowed down to a crawl. Then everything stopped. At this point, the plan had shifted from aggressively paying off debt to surviving. This was the right decision. Being patient is so much more productive than panicking, so wherever you may find yourself, control the controllables, pause if you absolutely have to, continue when you’re able.
And on the final payment at the end of the payment period, there was no celebration; however, there was no longer a car payment, there were no minimum payments and, therefore, no additional pressure or constraints that indebtedness brings.
