Debt Sucks! How to Eliminate Debt
Debt Sucks! How to Eliminate Debt
“Expect the best. Prepare for the worst. Capitalize on what comes.” - Zig Ziglar
The buy now pay later mentality has created trillions of dollars of consumer debt over the previous years. Are you tired of being stressed out about your student loans, car loans, bank loans, mortgage, and other types of debt you’ve accumulated in your life? Find out how to break free from debt once and for all and gain financial clarity in your life.
Debt seems like a normal thing to get into whether it’s from going to school, getting a car, a house, toys, or even paying for your monthly bills to survive. Credit cards are the new mainstream way to pay for everything. The unfortunate part is that these credit cards also known as consumer debt carry interest rates of about 20%.
When you don’t have the money to pay for something now it is likely to get put onto a credit card. Paying your balance off plus an additional 20% on the money you owe begins to add up quickly in a hurry.
Prioritizing a debt repayment plan is crucial to the life you live every single day. If you get too far behind on your debt, getting out can take years if not decades.
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What is Debt?
When you borrow money from a friend, bank, or other financial institution and need to pay it back it is considered debt. The money in which you are required to pay back. These also usually always carry interest. Interest is expressed as a percentage like the 20% extra required on your balance to pay back on your credit card for example.
When talking about interest and money you want to earn interest on the money you already have.. If you owe interest you will be losing more and more money, creating more debt in your life.
No one likes being in debt, it just plain sucks. When I was going to school I held a fully maxed out $4,500 credit card at all times. This seemed normal and like it would be around for a very long time, with the little to no money I was earning on a monthly basis.
I also was in over $50,000 of debt from student loans, and a car loan. It can add up really fast if you’re not careful. I’ve paid off all of my debt and am now debt free. It’s a feeling you must experience in your life, it feels like a huge weight has lifted off of my shoulders.
Money Tip: One tip I from my own experiences is to be careful of how high your credit card limit is. The reason I was in only $4,500 of debt on my credit card is because that’s what the limit was set to. If my limit was $10,000 I have no doubt in my mind it would have crept up to that number as well. Keep your limit on the low side.
Be careful of how high you set your limits for one or many credit cards. More is not better in this case, keep it something manageable, I’d say less than $5000, so you don’t make too many poor financial decisions and end up paying for it in the long term.
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Now you may be asking, ``How do I get out of debt? I know the money problems I’m currently facing, that's why I’m reading up on this content!”
Getting out of debt will be challenging for most people. Setting aside money that goes into an account(s) with no benefits to your life now, can be difficult to bear at the best of times. Most people think of buying something with money and getting something in return. When paying off debt there is no physical item or benefit to the transaction. This can make it difficult for people to set aside small or large sums of their money to put towards their debt.
It All Starts With a Plan!
When you want to lose some weight in January for your New Year's resolution what do you do? Go to the gym, get some new shoes and fitness gear, buy healthier foods, create a schedule for when and where you will train. You begin to put systems in place that will help you to reach your end goal. Whether it’s to lose 5 pounds or 50 pounds, the systems in place are almost identical to begin losing weight.
The same holds true for paying off your debt. Having a plan will help you pay off the friend you owe 20 bucks to or the truck you owe $55,000 on. If you don’t know how much or when you're making these payments you will either A. take a lot longer to pay it off or B. fail to pay it off completely.
Writing down what you want to accomplish will help you on your journey. If your credit card is maxed out at $4,500 like mine was, it’s time to figure out how much you want (and can afford) to repay each month.
Now, this step will differ from person to person as all of you will have different income levels and lifestyles. The idea behind this plan is to pay off your debt AS SOON AS POSSIBLE. Debt will only hold you back in life from taking risks and living the life you truly want. You don’t want to be hindered or stressed on the green stuff in your wallet or purse…
If you can afford to pay off $100 a month then do it, meanwhile if you can afford to pay off $1500 a month then good on you. The best and most effective way I know to stay true and accountable to your plan is to set up an automatic monthly transfer with your bank.
This is very easy to do and makes it effortless once it’s set up. All you need to initially do is go to your local bank (who you bank with) and get them to set up an auto-transfer each month on a specific day and amount. Once processed they will take care of the rest on a monthly basis. The great thing about this is when circumstances change all you need to do is call the bank to make a change. Whether it’s to change the amount you want to auto transfer or cancel the transaction all together. A simple phone call will allow you to make changes with ease.
This automatic transfer setup has allowed me to pay off over $55,000 in debt and save a ton of money over time. I know it sounds simple and too easy but trust me it works.
What Debt First?
Your main goal should be to rid your life of debt completely. Many of you may be homeowners so will likely be carrying a mortgage. This mortgage could easily be in the hundreds of thousands of dollars, which can take decades to pay off. You should begin to focus solely on your home payments after you’ve paid off any and all consumer debt.
The best way to pay off your debt is from the highest to smallest interest rates. For example if your credit card is maxed out at $4,500 at an interest rate of 20% and your student loan is $20,000 at an interest rate of 4.75%, pay off the credit card first. This way you will owe the least amount of money in the long term because you will pay less interest on your total debt over time.
Focus on the high interest debt and then transition to the lower interest debt and so on. Once everything is paid off and you are debt free - yay! Start double downing on your house or apartment payments.
Mortgage Tip: Want to know a cool trick to save you thousands of dollars and years off of your mortgage? Instead of making monthly or bi-weekly payments, make accelerated bi-weekly payments. Instead of paying only 12-24 times a year you will pay 26 payments (every 2 weeks consistently).
This will not only cut a 25 year mortgage down to 22.3 years, but also save you over $16,000 from a $360,000 mortgage! The extra couple of payments per month over the long run save you time and money.
Live Below Your Means - simple yet powerful words when it comes to money management! Check out our YouTube Video!
Now you know that debt is money that you owe back to a bank or other financial lender, having a financial debt repayment plan will help you get out of debt faster, and which debt to pay off first you will be able to break the debt habit for good! Doing a small amount of research and reading on money can help you 10 X your debt payment and savings for a lifetime.
If you haven’t already downloaded my book Optimal Wealth, be sure to get it NOW! It contains so much great information to finally help you make the financial transformation you’ve been waiting for!
Debt To-Do List
-List all of the debt you are in and the interest rates beside each account
-Create a debt repayment plan - on paper!
-Prioritize clearing all of your debt
Debt question to ponder - Be honest, why are you currently in debt? What can you do to turn things around?
Learn more about our book Optimal Wealth!
Finally, a simple and easy to understand book on wealth! You don’t need to be rich to live a great life… Knowing how to manage money is critical to your success. Being broke and living paycheck to paycheck is surviving, not living. Are you tired of being constantly stressed and worried about how to pay your bills each month?
Achieve financial freedom so you can travel, have fun, and get more out of life. In this book you will learn how to get rid of debt, budget, shift your limiting mindset, negotiate, invest, and understand money better. Chris has gone from being broke; $55,000 in debt, to making over six-figures while working less!
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Chris M Wilson is the founder and CEO of Your Optimal Lifestyle. An online entrepreneur, investor, author, and wellness expert. Chris wants to promote living a life of financial freedom. He resides in British Columbia, where he enjoys snowboarding and cruising on his motorcycle.
Chris M Wilson
Entrepreneur & Purpose Coach
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