This course goes pretty deep and spreads things out pretty well. Week 7 was about Understanding Debt, and this week is about getting out of debt.
Take Responsibility and Persevere
We started out discussing why God wants us to take personal responsibility for our lives. I do believe it is a gift from God that we are free to act and to choose so many things in life, especially living in America. Seeing that we are so free, there is accountability associated with our choices. Many people try to shirk responsibility and blame the Man, the system, the company, anything but themselves. Great freedom comes with great accountability. It’s easy to have excuses, but ultimately we have a lot of options in designing our lives.
We talked about how to keep going, even when work is difficult. A lot of it comes to having a positive attitude, increasing our faith and doing what we can to improve our situation. Having a Why makes life much more doable.
Eliminating Debt
I know a lot of people struggle with getting rid of and staying out of debt. It’s becoming increasingly known that our environment greatly shapes our behavior. This goes back to Constraint vs Restraint. Fix your environment and don’t rely on willpower. Get rid of the things that tempt you. Gamify your goals and know your tendencies.
This might require you to get “plastic surgery” and cut up the credit cards. It might require you to take a different way to work to avoid getting breakfast or a drink each morning. It might disrupt your social life. If you don’t find a way to get started and make a change, you’ll probably end up with the same results you’ve always gotten.
Debt Snowball
This is a fairly simple method that will help you gain momentum towards your goals. Start with the lowest balance debt and attack it with a vengeance. Once it’s gone, roll the money you were using to service that debt to your next largest debt. Repeat until all the loans are paid off. Dave Ramsey loves this plan.
Debt Avalanche
This is a more optimized approach but it can be more risky. This method has you focus on the highest interest rate debt first. Because it might take longer to pay down a larger loan, it can be easy to lose motivation and fall off the wagon. If you can get a good system in place and automate this, it is the fastest way to pay down debt.
Conclusion
We all know that it’s important to get rid of debt. Increase your income through a side hustle and pay extra on your debt. Decide on whether you can tackle the debt avalanche or if the snowball is the better method for you. Take 15 minutes a day and try to make small incremental changes. It might take some time but it’s definitely worth it.
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