In my last two posts, I looked at four strategies that you can follow to crush your debt: building savings, restructuring your loans, using the Cash Flow Index and being cautious about locking money into assets.
Without a fundamental change in consciousness regarding debt, none of these strategies will work in the long term. For lasting results, identify and solve the root causes of debt, rather than hacking at the byproducts (interest and bondage).
Before you employ the techniques I outlined in the previous two blog posts, ask yourself the following questions:
- Why did I incur each of my debts? What was the purpose? Was it my desire to consume or to produce?
- When I’ve incurred debt, how did I justify it?
- Do I seek consolation in material things? If so, what could replace the feelings I receive from borrowing to purchase material things?
- Was my debt caused by investments that were actually more like gambling—putting money into things I didn’t understand and couldn’t control? If so, what can I learn from this and how can I be wiser in the future?
- Was the debt due to a lack of preparation or a financial surprise from which I could protect myself in the future?
Getting and staying out of debt requires a fundamental shift. Here’s a simple guide moving forward: Never borrow to consume. Use cash for luxuries and only borrow for productive assets and resources or necessities. If you’re born poor, it’s not your mistake. But if you die poor, it is your mistake.
Getting your financial house in order is about much more than the technicalities of finance. It’s about your mindset and psychology. It’s about your willpower to defer immediate gratification in favor of long-term freedom. It’s about seeing and cultivating a vision beyond working 9 to 5 for the rest of your life. You extend your runway in life and expand your bandwidth.
As you crush your debt, you free up more cash flow that can be used to fund your investments with 5 Day Weekend Lifestyle
In my next post, I pause to provide come context on debt that can help you see some of the nuances in this often-misunderstood financial area.
I’d love to hear from you: if you’ve gotten into debt, how did you get there? What choices did you make? And are you at a point where you want to crush the debt you have? Thank you for sharing.
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