Your life and your retirement plans will be put on hold unless you get out of debt.
Debt holds you back. It is like a sword hanging over your head ready to drop and cut your neck wide open.
The finances around debt and paying back many multiples over what you originally used the debt for make no sense.
But most people have no idea about the math about this. You just go ahead trying to make those minimum payments and struggling to get ahead.
That is the reality of debt.
But the real problem is beyond the finances. The real problem is that debt forces you to live in the past. Every month you get a bill from the past demanding that you pay for something you did last month or last year or even 10 or more years ago. It is a constant reminder that your life today and what you want to do tomorrow have to be put on hold until you pay off your debts from the past.
That is the tragedy of this constant debt we subject ourselves to.
We have an extremely hard time enjoying today and planning for tomorrow because we are forced to live in the past.
So how do you get out of debt and stay out of debt?
If your debt is minor, just pay it off. Adjust your living expenses, sell something, make a little more money, and deal with it.
But I think you know all that already. There are thousands of articles reprimanding you to do just that.
The real problem is that the world is set up to get you into debt and keep you in debt and that it is in the world’s interest to bind you up in a prison of your own making, a debt prison.
It is so hard to enjoy your life today when you have a stack of bills to pay from the past. But you can’t get to live in the now when you are constantly being reminded of the past. It is so difficult to get paid today and enjoy that money buying things and having experiences with that money today and tomorrow when you have to deal with the debt from the past.
It is like a big claw coming from your past and dragging you back into a hole.
You want the sunshine of enjoying today, but you have to deal with the darkness of yesterday. The regret, the pain, the misery, the wasted time, the wasted life, the mistakes, and the regret.
So yeah, debt is not good. Get out of debt.
Easy to say, hard to do.
You might have to take more drastic steps than freezing your credit card in a glass of water and making a plan to pay an extra $50 toward your monstrous debt.
You might have to go bankrupt. It is a way out. I have done it, twice. It is not that hard, and the only ones who care about you going bankrupt are whoever you are trying to get a loan from in the future.
The hardest part of going bankrupt is coming up with the money to pay for your attorney. Once you get that money together, your attorney does all the work. You may have to provide him with some information, but that is life.
The main reason you get in too deep over your head is buying houses. A house is just a giant money-sucking pit.
I believe there has to be a different mindset about houses. A house is not the American dream. It is a nightmare of expense. If you believe that a house will solve all your problems and that it is a worthy goal, you need to take a step back and see who the real beneficiaries are of you going into massive debt for decades and with no way to escape that debt except giving the bank your house and you becoming homeless. At least with credit cards, they do not throw you out on the street.
Even getting your car repossessed is not that bad. You can always just buy a cheap car with cash. You will not be able to get much of a house for $2,000 but you can buy a car to get you to work.
If you are stuck in the American nightmare of too much house, get out of debt and let the bank have the house. Sell it or let them have it. Move on with your life. Don’t worry so much about what they say. These stupid, big, expensive houses are not the way you will have any freedom or happiness.
I am not against houses, only a house that takes up too much of your normal monthly income. Your house should be just a minor expense that you can easily afford. You cannot expect to have much of a life if the choice is between paying your mortgage or buying groceries.
Forget the expensive houses and rent as cheap of a place as you can stand until you get out of debt and your finances work better.
The numbers do not add up when the mortgage is 20 or 30 or more percent of your income. You just will not have any extra money.
And extra money is what you need to have a life. The extra money is your life money. The money you need to do things and have adventures and to just live in a way that brings you some happiness.
A big house will not let that happen.
Let that house go and get out of debt.
I know you want to think that just working your way out of debt is just a matter of not spending so much money on coffee, lunches, and entertainment. That is just simplistic thinking. The problem is that you are spending too much on your housing. They want you to be in debt.
Whether this is a carefully planned conspiracy or not, the effect is the same. You are in debt with an extremely difficult road ahead to get out of debt without making extreme changes to your lifestyle.
This does not have to be a bad thing. I lived in a 2,400 square feet, beautiful, newer, ranch house. It had a half-acre lot, a 2.5-car garage, a whirlpool tub in the master bedroom, a gas fireplace. It was beautiful. It was my dream home.
But it was too expensive based on what I know now. I got caught up in the boom time when the banks would give too large of loans to people like me who could not really afford it.
I mean the numbers showed I could afford it and I could most months.
But those bad months would come and devastate my finances. It was like the whole system was set up for me to not get out of debt.
If you are a parent you already know the bad months…August when you have to pay for the free public school fees which are enormous, school supplies, and schools. The next worst month is December because of Christmas. I have hated Christmas all these years. It has put me in financial holes that take months to dig out of. And your kid’s birthday months. These months wreck your finances because your mortgage is based on you paying most of your money toward your house with not much left over.
August comes with an extra $500 for your high school freshman and an extra $250 for your 4th grader. They both need new jeans, new shoes, new shirts, new jackets, new backpacks, and a backpack full of school supplies.
So you fight through that month barely paying the mortgage and letting the other bills slide a few weeks taking your late fees like a man figuring you can catch up in September.
But September is one child’s birthday month and your wife is planning a big party with all the relatives. Everyone would be happy with a modest party, except your wife who likes to make a big deal out of birthdays.
You stress out in the costly preparations but the party is really nice and your child is happy.
You can dig out in October and maybe you do… that year. In November and December, the Christmas shopping starts and does not end until Christmas Eve, except for the after-Christmas sales.
You are hoping for a big end-of-year bonus in January to help you out of this mess.
Last year you received a check for $1,800 and that would be great this year. You figure you can get out of debt with that big bonus check.
When you get that envelope later in January you open it eager to see that big check and all that is in there is a letter explaining why you will not get a bonus this year, hopefully, next year the economy will be better,
And that is how you get in debt and stay in debt year after year.
It starts and ends with a house that’s too expensive.
All these other expenses and sources of income fluctuate from month to month. Some months you will make more and some months your expenses will be enormous.
The only thing you can control is the size of the biggest fixed cost you have…your housing.
Get out of debt by scaling back the cost of your house.
You may need to sell that house now and rent a place at half the cost or less to get your life back.
I just cannot stress enough how debt is even more of a problem with your mind than your bank account. The constant looking backward just kills your dreams. And it makes you want time to speed up. You get paid, pay a few bills, and wish for the next payday to arrive sooner so you can pay more bills. Then 2 weeks later you wish time would speed up to get paid again.
It makes no sense to get yourself into this mess. Yet you do, I do, we all do.
But that does not mean we have to continue following this mindless pattern of trying to get out of debt and hoping to do so as fast as possible.
