[Debt Freedom Series] Paying Off Debt Without Feeling Impoverished, pt 1
If you have debt then you know how much worry, stress and anxiety it can cause. So in this series I'm going to share some tips to help you eliminate some of those fears and worries so you can live joyfully and richly, even while you're in the process of paying down or paying off debt.
First of all, it's important to understand that there are just 3 things you need:
Honesty, A System, and Motivation.
With these elements in place you'll be surprised how quickly you can pay down or completely pay off your debt.
Carrying debt can cause of a tremendous amount of guilt, stress, shame, resentment and anxiety.
So paying it down or paying it off can feel exceptionally freeing and liberating.
Just imagine how good you'll feel when you no longer have those debt repayments and finally get to keep all of your money!
In order to be successful in not only getting out of debt, but staying out of debt, it's critical not to feel impoverished while you're paying it off.
Feeling poor is demoralizing and stressful, and you won't stick with it in the long run. If you try using an austere or strict budgeting plan, at some point you'll rebel or feel resentful and overspend.
In order to avoid that, here's the first thing to do instead.
Start by setting aside a cushion of money that gives you some breathing room. I sometimes call it the SHTF (sh*t hits the fan) fund. This is money (about $2k) set aside for things like an unexpected car repair, the fridge going out, a week of missed work, etc.
That way you don't have to put it on your credit card and you stop creating new debt.
Figure out how much you want to put toward this fund each month and set the date for when it will be fully funded. Mark that day on your calendar. It's a major financial freedom milestone! You've taken your first step toward ending the debting cycle and being completely free of it for good!
Plus it feels great knowing you have some extra money in the bank to cover stuff that comes up.
You may even notice a little more wiggle in your walk. You'll likely sleep better too because you've given yourself some peace of mind.
Meanwhile, pay the minimums on your monthly debt payments until your cushion is fully funded.
This is temporary and may feel counter intuitive. But trust me, this process works.
In upcoming posts in this series I'll share powerful tips and strategies to help you accelerate funding your SHTF fund and debt repayment while still living a rich, juicy life without feeling impoverished.