8 Tips On How To Become Debt Free

How to become debt free using your mind

One of the most common questions I get asked when it comes to money is how to become debt free.

My answer is always the same.  You need to follow the practical rules of money, but you also need to change your mindset.  

Albert Einstein is quoted as saying 'We cannot solve our problems with the same thinking that created them…' and this is so true.

I have written a fair amount in an earlier post about managing debt where I cover the basics to this question and give you the practical ‘doing’ side of the answer.

But I want to focus today on how to become debt free from another less accepted, but just as important angle - your mindset.

In fact you could argue that your mindset is actually the most important aspect because it governs your feelings, thoughts and actions… which bring about your experience.

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How Did You Get Into Debt?

A lot of people who aren’t in debt equate it with overspending on big TVs or expensive cars.  And whilst that may be the case for some, there are lots of other scenarios.

For example, I got into debt when a business of mine failed.  Coupled with my lack of foresight at the time, this put me in a very difficult situation to say the least. 

Another reason could be illness or an accident resulting in unexpected and large medical bills and maybe the inability to work.

Each path will result in different emotions, depending on how your debt came about.

You may be feeling angry at yourself for overspending or for not having the foresight to take out some kind of income insurance if you lost your job, for instance. 

You could be blaming someone or something else as the reason for your financial crisis, and feeling like a victim.

Or maybe you’re feeling a large dose of self pity – why me?  It wasn’t my fault the GFC came along and wiped my business out.

But the bottom line is – no matter what your circumstances are, debt has arrived on your doorstep and no amount of soul searching or playing the blame game is going to take it away again.  What you need is a new way of thinking about it.

At some point (and the sooner the better) you have to put a stop to those negative thoughts and accept that you are in this situation, and that if you knew better at the time you wouldn’t be.  But by and large you were doing the best that you could back then, so lesson learned, time to move on.

You have to let go of all those self sabotaging emotions of anger, self pity, even lethargy (what’s the point?) and fear.

Then turn your focus to how to become debt free as fast as possible.

There are so many examples of people who have fallen from grace financially, only to rise from the ashes to achieve even better financial and personal success than before.  And nearly all these people actually feel gratitude for the wake up call they got.

You see nothing happens by mistake.  There is no such thing as fate.  Usually there are many, many warning signs leading up to the final situation.  Unfortunately these warning signs are often only apparent to us after the event, but you can learn from them so you don’t repeat the experience.

How To Become Debt Free – The Role Of Your Mindset

Feed your mind with positive ideas...

Do whatever it takes to feel better on a daily basis – read motivational books, read about others who have paid off a mountain of debt on average wages, like Stephanie Hood, who paid off $90,000 in 3 years.  Jackie and Miles Beck who paid off $147,106 and Shannon Brown who paid $22,047 of debt off in 9 months.  There are plenty more stories where they came from too.

The end result is you'll realise you're not alone and will begin to harbour a belief that this is not the end of the road, this is just a little blip and it may very well be just what you needed to rise to greater success than before.

Acknowledge your part in the situation...

Before you jump up and down telling me it wasn’t your fault… take a look at the real reason you’re in debt.  If it’s an illness, it could be that you chose not to take out either medical insurance and/or income protection insurance.  I’m not talking about blaming yourself – but acknowledging it was your choice.

In a business situation like mine, my choice was to continue even though there were warning signs, because I didn’t want to admit defeat… the downward trend in business wasn’t my decision, but how I reacted was.

Take responsibility now for your thoughts and feelings...

Only YOU can change them.  Start to see what makes you feel great, what brings you down.  Focus on the things that uplift you.  This may seem unrelated to your debt, but how you are feeling has a huge impact on the decisions you make. 

Don't hang around angry broke people...

Misery loves company as the saying goes and it’s amazing how much you let yourself off the hook if you spend time with others who are broke and complaining about it.  

If you start talking about how you’re going to pay off your debt within 12 months, it forces them to confront their own lack of action, they feel even worse about themselves and so they will feel the need to bring you back down to their level by telling you that it’s impossible.  It's just best not to go there.

Guard your growing positivity with your life!

Imagine planting a tiny seed in a pot – some exotic flower or beautiful fruit tree you want to grow.  How will you nourish it?  You’ll make sure it has enough water – but not too much, enough sunlight, but not too much.  You may even talk to it or sing to it :) ... Whatever you do, you take care of it to nurture it until it grows strong enough to resist the wind and rain it may face in your garden.

You have to do the same for your new mindset.  Don’t stand out in the wind and rain before you’re resilient enough to ignore it.

Set a plan and a goal

Have a reason for paying off the debt.  I have to be honest, to start with for me it was just being able to sleep at night.  But as the debt started to diminish, I started thinking about slightly more ambitious plans; like taking a trip to visit family, getting  a garden service to keep my garden in shape instead of doing it myself.  So don’t think you have to have some massive goal (although if you do that’s great!), but do start thinking about what your life will be like once you’ve paid off your debt.

Shift it from your daily awareness.

Set a payment plan and put it on automatic.  This sounds like a practical aspect, and it is.  But the end result is that you are not constantly thinking about it – so you can focus on positive, fun things again.

Make sure you have a life! 

Set up your repayments so you do have a little wiggle room.  Movies with the kids on weekends or a date night with your man once a month…  Having some fun in your life will help to keep you in a positive frame of mind.

Whether you act on all these tips or just some of them, the main point I really want to get across is not to ignore the role that your mindset plays in how you're going to become debt free.  Your whole experience can change just by changing how you think about it.

I hope these mindset tips have given you another angle on how to become debt free.  If you have any others (and I’m sure there are lots!) please share them below… I’d love to hear them!

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