There are three steps to paying off your debt:
1) Create useful thoughts
2) Create a plan
This is the first of a four-part series on paying off your debt. This series will not focus on on just cutting costs, but rather what is really needed to pay off your debt and stay out of debt.
The first step is to CREATE USEFUL THOUGHTS. If you have a thought like, “I’ll never get out of debt” then you won’t. In all honesty if that was true why would one even try to pay off their debt, it would be pointless.
Thoughts alone will not get us results, but our thoughts create our feelings which drive our actions which produce results. You can learn more about this in my first post, “Money Thoughts and Beliefs.”
Most people’s thoughts about debt fall into one of three areas:
In an article from Scientific America shame is defined by comparing to guilt.
Shame – View ourselves negatively.
Guilt – We view the action negatively.
If we were having second thoughts about a $1,200 iPad we bought shame would say, “If I had more discipline I wouldn’t have bought that.” Guilt says, “I shouldn’t have bought that.” Shame focuses on the worthiness of the person rather than the action.
The results of shame prevent us from make significant progress. Psychology Today states
Being “bad” means you see yourself as incapable of changing or doing better.
In another article Psychology Today states:
Given that shame can lead us to feel as though our whole self is flawed, bad, or subject to exclusion, it motivates us to hide or to do something to save face.
There are several ways to overcome it but two of the most effective are:
1) Talk about it with someone – This helps us realize all the negative thoughts we had about ourselves isn’t true. The less we talk about our “shameful” actions the more power it has over us.
2) Move your thoughts from shame to guilt. There is more information on creating new thoughts in my post, “Five Steps to New Thoughts.” Moving from shame to guilt allows us to focus on correcting the action (paying off our debt) rather than changing ourselves (“I have no discipline”). Correcting the action is much easier to do.
Paying off $500 in debt does not give the same feelings of gratification as spending $500 at your favorite store.
To help with this I’ve created a spreadsheet which visually shows you the amount of debt you’ve paid off over time in comparison to your original debt. It helps you see the progress being made and helps create motivation to keep going. You can download it for free.
Paying off debt often takes time. Living in a time where all our wants can be met almost instantly makes this hard. But, if money doesn’t by happiness, then why does having debt make us unhappy? Obviously debt does not make us unhappy but our thoughts about it do. People come under the false pretense that paying off their debt will make them happy.
Understanding this the longer time needed to pay off debt works in our favor. We can do it as fast or as slow as we want. The slower route allows less changes to our current lifestyle and can often result in a more consistent approach to debt reduction.