Financial Freedom comes from building wealth for the future so that one day, work is optional. But for many of us, we’re not starting from zero, but from a minus figure. We have day-to-day debt on credit cards, personal loans and the like, and we need to clear that before we can start to build. This blog series is the ultimate guide to clearing down, paying off, eliminating your debt.
Introduction
Debt is much more than a minus figure on our family balance sheet. It is a millstone around our neck; it weighs on our psyche. It can make us feel like we’re never really moving forward; taking one step forward, and two steps back.
But it really doesn’t have to be this way. Debt can be eliminated systematically but it needs to be understood and then corralled in the right way, and that’s why we’re here. This is designed to be the Ultimate Guide to debt elimination.
Not all Debt is Bad
Debt is a funny word. We’ve become desensitised to it to some degree, I believe. And in so doing, we’ve learned to rationalise debt too. I had a guest on years ago who said, on this show, “I love debt.” He was talking about using debt to buy investment property, which is what most of us do, so that clearly wasn’t a bad comment, despite its unhelpful way of being communicated.
So, is debt bad or isn’t it? Well most of it is, but some of it isn’t, in my view. I have a very clear distinction between good and bad debt, but for now, let’s just agree that some debt is good but most is bad, OK? Cool.
Debt is a Massive Psychological Burden
It’s hard to overplay just what a burden debt can be. I don’t have figures for this, but it’s pretty well-documented that money worries, including debt are a large contributor to people taking their own lives. The threat of bailiffs knocking at the door to recover a debt and the shame of failing financially are huge weights.
And even if the debt is not acute, it can be demoralising never to feel like you’re getting ahead, because when you get paid, all you do is fill up your overdraft back to zero, and then spend the rest of the month spending it back down again.
No matter the size of the debt, its weight can be felt, like a ball and chain around our ankles, holding us back from achieving all we could do. When we owe people or companies money, we are making them richer, not ourselves, and that is reason enough not to take debt lightly – why would we make other people richer than we are ourselves?
Help is at Hand
It’s important to say near to the top here that if you are buried in bad debt right now and you feel like you’re sinking below the surface, you need to get help. Chances are you might not be able to help yourself but there’s no shame in that.
Charities like CAP and StepChange will help you to negotiate with creditors and build repayment plans. Another option is PayPlan which is not a charity but which is funded by donations from the credit industry, and there’s also the Citizen’s Advice Bureau.
Please – don’t bury your head in the sand and do nothing; it will not get better that way. Reach out to someone who can help practically and start moving towards a better future right now.
No Quick Fix
If, for you, it isn’t that bad, but you’re resolved to beat debt so you can really move forward with your finances, then you need to know that there isn’t a quick fix for this. It’s going to take the most laser-focused effort you’ve ever applied to your finances.
The method we’re going to get to will show you how to beat debt, but don’t consider things like Individual Voluntary Agreements or bankruptcy as easy fixes. It really isn’t as simple as getting everything wiped off and starting again.
Those processes may be an option for you but they have far-reaching consequences for you and anyone living with you, potentially. We need to resolve that we’re going to get help if we need it, and set our minds to the task ahead, and not just look for easy ways out. It’s not the quick fix; it will take some work.
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