To truly become free – and stay free – from consumer debt, it takes a strong shift in mindset, akin to the force of a tsunami (as my blogging colleague Baker from ManVsDebt has creatively put it).
What’s the point of paying off all those credit cards if you’re just going to end up racking them up again? If you have to do that, it’s a good sign that you haven’t budgeted properly and/or you’re not living within your means. Unexpected expenses, you say? Make a note of what they are, how much they cost you, and make a plan for saving money for paying for them in the future. Add them into your budget. Have a savings category that will provide you with this leeway.
Myself, I’ve recently been forced to get extra-serious once again about tackling my credit card debt. Keep in mind, now, that I’m a grad student already living with a fellowship just barely above the federal poverty line. When I put in the numbers for fixed costs (and those include the amounts I put into carefully researched stock investments), I’m left with about $500/month in money for “living expenses.” (No, I don’t have a car. I don’t even have a TV, either. Or pets. This is a large part of the reason why.) That means that if I don’t want to break out my credit cards and incur more debt, I’m going to have to live as frugally as my friend Jacob and adopt the early retirement extreme lifestyle:) – which, thankfully, inspires me quite a bit anyway.
Here are just some of the tips that motivate me to try to tackle the $6,990 in credit card debt that I owe. Maybe some will strike a chord with you, too.
Motivational Tips For Getting Rid Of Your Credit Card Debt
- it is the living vestige of all your prior money mistakes
- it takes up part of your focus and attention
- it complicates your life
- it is a (karmic) debt you owe to the company/city/nation/universe
- until you are free of debt, you are not really free at all
- it creates a distortion (on a level the size of the debt) in the balance sheets of the economy
- how can you criticize the federal government for overspending if you do it yourself?
- you are not in control of the interest rates charged
- each payment made steals from the potential time in the market that money could have had
- every interest payment you make erases any gains made in your savings accounts
- it’s like having dirty laundry lying around
- it’s a chunk of money someone keeps making off of you
- it’s another leak (or three!) in your bucket
- it means you’re not fully in control of your life
- it means you don’t know yourself (your wants vs. your needs, etc.)
- no matter how well your investments do, they are held back by all this debt
- it means you can’t take advantage of certain opportunities as they appear
- it means you’re “behind on life”
- it’s proof you’re not as organized as you think you are
- what will it feel like to still have this amount of debt in two years? in four years?
As you can see, many of these tips are psychological in their appeal. I’ve highlighted some of my favorites. We know mathematically how debt puts us behind and prevents us from moving forward, but it seems more effective to tackle some of the psychological aspects and significance that holding all this debt has over us. I encourage you to make up a similar list. What do you tell yourself about the debt you owe? Try it for a few minutes – it might take a bit to get on a roll. You might want to try to draw up a budget or plan your finances for a bit first. That’s what did it again for me.
Time and again, debt just gets in the way. Accept that it represents mistakes you’ve made, and now just correct course and move on. Find a way to ensure that these mistakes won’t happen again.
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Hi, as a recent graduate student I completely sympathize with the feeling that there’s no way to make a decent living on a scholarship. On the other hand, being a grad-student no more I can tell you that there’s light at the end of the tunnel, and your efforts will be compensated once you finish.
Thank you for the tips to tackle credit card debt, I’m sure they work for changing any other type of bad habit too, so I could definitely apply them to other areas of my life.
I’ve been browsing around and found your blog very interesting, I’ll definitely keep coming back for more.
Hi Kelly, thanks…. yes, the light at the end of the tunnel is always good to hear about!:) I also feel I’m sure I’ve learned my debt lesson and won’t be falling into that hole again once I’m finally paid a real salary!
I saved about $75000 or so the four years I spent in grad school. Admittedly, they were paying me about $25000 a year (I was in science). I think most of my fellow grad students burned their money on renting their own apartment (I stayed at an off campus “dorm”), but also on food and entertainment/conveniences. Only a few had cars.
That’s amazing…. I’ll be lucky just to not incur new debt. And I’ll have a bit saved. I don’t think that at this point in my life I can continue to skrimp on low-class housing and certain conveniences like cab fare anymore. I lived really frugally in my undergrad, and I guess I’m finding out certain limits. If I’m being paid to do independent research, I need to be in the proper environment for it – I couldn’t live with three roommates anymore, and I can’t take 2 hours just getting home on public transit anymore – my time is worth more than that. So I spend extra on cab fare.
There is not point in grieving over your debt; the sooner you erase it, the faster you can enjoy financial freedom.
I’ll be sending a link from your site to my best friend who has been ignoring her huge debt. I hope the motivational tips might get her moving in the right direction. Thanks.
@Gordon – you’re right. Just plow right through and get rid of it.
@CCDG – thanks! Hope it helps.