4 Timeless Principles For Absolutely Crushing Your Debt

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.” - Ogden Nash

Think about it. How many credit card offers show up in your mailbox over the course of a month... How about over the course of a year?

My wife gets no fewer than two per week! Insane!

Dave Ramsey is often heard saying, “You can wander into debt, you can’t wander out. You have to get really mad, really intense, and really focused to get out of debt."

With the power and influence of what I call the "marketing industrial complex" coupled with a culture that has devolved into an instant gratification machine on organic, gluten-free, non-GMO steroids, the odds are stacked against you if you don’t have a plan for your money.

You’ve GOT To Have A Plan

Another Ramsey-ism I’m fond of sharing with students and clients is, “if you don’t have a plan for your money, someone else does.”

The banks, the credit card companies, the auto lenders, etc. are lining up to give you THEIR plan for YOUR money.

At the foundational level, our education system does absolutely nothing to proactively prepare young people for the financial realities of everyday life.

Basic household budgeting, balancing a checkbook, avoiding debt and investing are all subjects that are completely absent in both the public school realm as well as the university educational realm.

And so, we have 78% of the population living paycheck to paycheck and over 80% with significant and, in many cases, crippling levels of debt.

So what do you do?

These are the 8 Steps I followed to get out of $43k of debt in 2.5 years. Trust me they work!

4 Timeless Principles For Absolutely Crushing Your Debt

If you find yourself caught up in this financial tsunami of debt, like I was not so long ago, you need a plan and a support network to help you climb out of the hole and back fill that sucker forever.

Here are 4 principles or baseline “mindsets” that are absolutely necessary to getting out of debt and staying that way.

1. Decide That You Hate Debt

Decide that you've "had enough" of feeling like this. Time to take charge of your money!

This is absolutely pivotal. If you don’t do this, you might as well stop reading this and go back to watching cat videos on YouTube. 

If you don’t decide that you absolutely hate debt, then none of the rest of these 4 principles even matter. 

Why? One huge reason is because I’ve seen MANY people get completely out of debt, relax, start using credit cards again and end up in an even WORSE position than they were the first time around. 

Debt is the thing that’s gotten you into this mess. Even the Bible says, “The borrower is slave to the lender.” 

You have to decide, “no mas!”.

Debt absolutely limits your choices in this life even thought the very opposite is what's marketed to us (i.e. "credit" as "freedom" and "choice").

You have to come to the realization that debt is allowing others to have control over you in ways that may not be readily obvious to you until you sit and and actually "do the numbers".

So let’s just make a pact that we’ll never borrow money again for any reason whatsoever. Deal?

2. Own Your Story 

Your story is yours alone. You won't accomplish anything by comparing yourself to anyone else.

It’s going to be tough, but I want you to not compare yourself to other people or to compare your story with their story.

This is a temptation that can derail your efforts in an instant.

Remember that, FaceBook is a liar. Instagram is a liar. Those impeccably staged photos and stories are just an “optimized snapshot” of someone else’s life at a particular moment in time.

You have no idea what’s really going on behind the shot of that “apparently” awesome trip to Europe or the week-long Disney “excursion”.

Chances are, those were “financed” with a credit card. Please look the away! I need your to focus on your own pile of debt.

Remember, 78% of the population lives paycheck to paycheck. That includes many people who make over a six-figure income and post their "fabulous" stories on Instagram.

Your story is yours and yours alone. We’ve all made some really dumb financial mistakes in this life, myself included.

Actually, you can read more about my story at: $43k Paid Off!

Don’t dwell on your mistakes. I can promise you that, once you’re on the other side of this debt pile, your story will help to encourage someone else to climb out of their own hole.

Try to think of this process as though it is a book you’re writing to chronicle your history and to help someone in the future.

3. Trust The Process

“The Process” in this case is whichever system you’re using as a foundation. The 8 Steps To Erase Debt is our system.

I really don’t care which system you use. I only care that you plug into one, stick with it and get out of debt forever. 

Believe me, if I can do it, so can you.

$43k in 2.5 years may seem insignificant compared to your debt. Or, it may seem like you're climbing Mt. Everest.  It doesn’t matter, the process is the same no matter the size of the pile.

Plug into the plan, trust and follow it granularly and you’ll transform your life into one of debt freedom and ultimately of financial freedom and peace.

It works, I promise. Just trust the process.

4. Get Started And Refuse To Quit 

Get started, resolve not to quit and, over time, the results will take of themselves.

Things will get tough, that's guaranteed. Like the saying goes, “If it were easy, everyone would be doing it.”

You might even quit for a time. That’s okay. Just resolve that it’s a “pause” and that you jump back in the game asap.

That may mean that you need some assistance, another set of eyes on your situation.

So, for crying out loud, reach out for help when you need it. Even if you have to pay a little bit, isn’t it worth it to help you be released from your own debt slavery?

And, whether that’s me or someone else, please don’t put it off. We don’t bite, I promise.

Your future self will thank you profusely!

You Can Do This!

So, in conclusion I just want to encourage you here.

Having gone through this process over a decade ago and having been debt-free for about that long, I can tell you that it’s absolutely worth the fight.

I want for you to take a few minutes and list out all of your debts.

Now, list out all of the minimum monthly payments you have to pay to service that debt.

What’s the number? Does it make you feel like you just got kicked in the stomach?

Now, imagine for a moment that instead of “paying” all of that principal and interest, you were instead “earning” interest by putting those dollars into things that were paying you.

THAT’S the point I want to get you to.

So, let’s get started!

0. Stop All Retirement Investing (Until Step 4)

1. Build A Budget

2. Starter Emergency Fund of $1000

3. Eliminate Debts Smallest To Largest (a.k.a The Debt Snowball)

4. Full Emergency Fund of 3-6+ Months’ Expenses

5. Invest A Minimum of 15% Income Into Retirement Accounts (and increase savings rate to 50%+ if possible)

6. College Funding (if applicable)

7. Pay Off The Home Mortgage

8. Build Wealth, Serve, Be Ridiculously Generous And Go FI (Financial Independence)!

What To Do When You Can't Pay Your Bills - Dave Ramsey's "4 Walls"

18 Expenses You Should Obliterate From Your Budget

How To Start Budgeting When You're Terrible At It

8 Steps To Erase Debt - And Get Your Life Back

9 Things We Do To Save Money Like "The Millionaire Next Door"

7 Budgeting Mistakes We All Make (And How To Correct Them)

What Is Financial Coaching?

$43k Paid Off!

The 4 Most Popular Reasons People Seek Financial Coaching

When Is It Okay To Say "I Can't Afford It"

How To Get Your $1000 Emergency Fund - Fast!

12 Things We Don't Spend Money On

How To Be Financially Prepared For The Coming Recession

11 Irregular Expenses You Probably Forgot To Budget

4 Not-So-Obvious To Rewrite Your Budget Every Month

12 Things You Should Buy At The Dollar Store And 5 You Shouldn't

When You Need More Help