Why I Decided to pay off Debt

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Where I Was

When I was just starting out on my own, there were many things going on in my life. I was learning what bills were and how they worked and how credit worked as well. I had a mindset of “how much a month”. If the amount was less than I could afford, I would do it and think that I would just pay it off over time. I was starting down that path of preventing my future self from being able to take action sooner.

I was young. I was only around 21. By thinking that I was an adult, I worked on trying to gather all the “things” that I thought adults needed. I rented an apartment, financed dishes because we had to have them, financed a vehicle because I couldn’t afford to pay for one, opened up credit cards for consumer goods like a TV and other things to get my lifestyle up so that people didn’t think I was broke, among other things.

I think some of it comes from thinking I am going to be around forever. When we are young, we don’t really look at retirement as a real thing. I know I thought it was just a thing that I could save for later on. I didn’t feel any sense of urgency or anything like that.

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The Turning Point

I’m not sure when it actually happened, but I do remember sitting down to pay my bills one day and feeling that constricting feeling because money was getting tighter and tighter due to the way I was managing my money. Close to this point, I remember one month where I actually had more in bills than money coming in. It was a scary experience and I think that’s what actually got me thinking “there’s got to be a better way”.

At that point I started researching and learning about debt repayment and trying to figure out a way that I could get ahead of things just so I could survive. At this point, I was just learning to be able to pay my bills. But, I think if this wouldn’t have happened, I wouldn’t be in the spot where I am now.

How did we get there? I believe there are a few key reasons: We had some changes in our mindset.

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Mindset Changes

Despise Material Possessions

One of the big things that contributed to my debt accumulation was my love of “stuff”. When I wanted something, I thought that financing it was a way that I could get it. By telling myself that the only way to get stuff is to save up and buy it, I have saved myself from making many bad purchases that I would regret later. I have started reading more minimalist resources to keep myself in the “I don’t need stuff” mentality.

This mindset is very much a “what you put in, you get out” situation for me. I have to be very careful about letting ads in front of me and how much I research stuff on the internet because I start trying to justify myself having it. By reading minimalist websites like Becoming Minimalist, I have found that I can combat that purchasing side of myself and remember why I am trying to save my money.

Also, just calculating the opportunity cost of the item has been very helpful. When you are looking at your next $250-$500 purchase, brainstorm different things you could do with that money. By thinking about it this way, I look at what would happen to that money if I were to save it, buy something different, invest it, or use it to buy more freedom of time. This allows me to process the purchase in my head before I actually make it and see if I can cause any buyer’s remorse.

Cars Are A Tool, Not A Luxury Item

Lots of people love their cars. I have never been a huge fan, but it is nice to be able to have a few bells and whistles when I’m driving around. I actually have never bought a new car because I could never justify spending that much money driving around destroying it.

I viewed vehicles as a way to get around and have consistently driven them around to get from point a to b. But, the bigger part is that I don’t make payments on them anymore. I buy them outright. My family has saved up and purchased both of our vehicles we currently have. By not having payments, we are free to save more money, put our girls in better daycare, and have more freedom from our jobs without having to rely on overtime to make the bills.

Realized Money Is Finite

Another big mindset that I went through while deciding to pay off debt was that I finally realized that money was finite. I’m only going to make so much of it and I should be using it better so that I can have some of it working for me to leverage my time and earning power.

I Wanted To Help People

When you’re broke, you don’t often have the resources to be able to give as freely as you may want to. By us getting out of debt and saving up money, we have been able to build up margin so that when we see someone in need, we are able to give money to help their situation. Not only on the money side, but, when you don’t have money issues on your mind all the time, you can actually look beyond yourself and start seeing all the other problems out there.

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Where I Am Now

So, flash forward another 6-7 years. My family is out of debt except for our mortgage, we are on a written budget each and every month, we almost have a fully funded emergency fund of 6 months of expenses, and are looking into starting investing on top of what we already have saved, and we cash flow things that come up easier than ever these days because we’ve built margin.

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What Can You Do To Get Started?

The first thing you need to do is decide that you’ve had enough and want to turn things around. After you’ve made this decision, you are going to need to create a budget and stick to it so that you can create a plan to paying down your debts and build up some savings so that you can have margin in your life to create opportunities. If you need help with this, drop me an email at [email protected] and let me know. I would love to talk about it and help you out.

So, that, in a nutshell, is most of the reasons why I decided to pay off debt. Have you started your debt payoff journey? What was your turning point? I would love to chat about it! Let me know in the comments!

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This post was originally published on MyFamilyOnABudget.com and is republished here with permission.

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