As a financial coach, it’s no secret that I hate debt. But it wasn’t always like that. I once used debt believing it would help me get ahead in life. At the time, debt was a tool for me. After all, if I could afford the monthly payment, then it was okay. Right? Wrong. As time went on, I discovered how debt steals from me. And debt steals from you too.
If you want to find true financial freedom, you need to learn how to hate debt. Debt will pretend to be your friend until you’re unable to make the payment. After that, debt becomes an unforgiving master. “The borrower is the slave of the lender.” – Proverbs 22:7
Don’t let debt be your master. Instead, learn how to hate it and kick it out of your life! But first, you need to learn how debt steals from you.
1. Debt steals from your future
Not too long ago, I saw a post on social media that intrigued me. This isn’t verbatim, but it said something along the lines of, “This quarantine is the closest millennials will ever get to retirement.” He then went on to explain his crippling debt, which included student loans, credit cards, and car loans.
Being a millennial myself, I thought this an unfortunate outlook on life. This is clearly a guy who believes he has no future. And it all comes down to the fact that he has a ton of debt.
If you have a $300 car payment, $300 student loan payment, and $200 in credit card payments every month, it doesn’t leave much room for retirement planning. That’s because that money is going to debt, and that debt is stealing from your future.
2. Debt steals from your dreams
During my day job, I work for a Christian missions organization. Part of my job involves speaking with those interested in serving overseas. Their passion is contagious and I love hearing their stories. But there is one question I almost always dread asking them. That question is, “How much debt do you have?”
I asked one young college student this question and his answer shocked me. “I’ll only have about $60,000 in student loans when I graduate. No big deal.” No big deal?! I hated to break it to him, but missionaries don’t make a lot of money. His monthly payment would be almost his whole monthly salary!
That young man’s dream was to be a missionary. Maybe that’s not your dream. Perhaps your dream is to move to pay for your children’s college, pursue a particular career, or retire early. But if you don’t take control of your debt, it will steal those dreams from you.
3. Debt steals from your family
In high school, I had a teacher who often sang the laments of her student loans. At that time, she proclaimed that she still carried the burden of college after 1o years. We knew she had two young children, so someone asked her if she planned to help them with college. “Absolutely not,” she said plainly. After that, she explained her struggles and her pain, and her children needed to experience that too.
I can’t help but wonder what her answer would be if her situation were different. If she didn’t have student loans, would she be willing to help her kids with college? Unfortunately, I don’t have an answer to that. But I would wager that her attitude would change if she were debt-free.
Debt steals from your ability to provide for your family. Furthermore, debt and money issues cause problems within families. Everyone in the family feels the strain and stress. If it gets out of control, you may find a heap of broken relationships. Debt steals from your family, and not just in a monetary way.
4. Debt steals your joy
I know a guy who is deep in debt. For the sake of anonymity, I’ll call him Jim. Jim is a pretty average guy with a good job and makes a decent salary. However, he also has a dirty secret. He is more than $75,000 in debt. This debt includes his student loans, credit cards, and all the other little things he financed.
He got to the point where he couldn’t control his spending. Every time he saw something he wanted, he financed it. At one point, his monthly minimum payments became so large that he couldn’t afford his rent. Everything went into collections. As for Jim, he began to have trouble sleeping, his job performance declined, and he sought counseling for anxiety.
Do you believe Jim had joy in those moments? No, he did not. Debt stole his joy. People often forget about the emotional and mental stress of debt. Don’t allow stuff to be your master, and don’t let debt steal your joy.
Debt steals from you, but there is hope
So you see now that debt steals from you. Now what? What if you’re in a heap of debt and don’t see a way out? Well, I’m here to tell you that there is hope. Anyone can make a plan and get out of debt.
1. Build a budget and create a plan
This first and most important step is to make a budget. Why budget? Because a budget is you telling your money what to do every month. And guess what? Budgeting works even if you have an irregular income! It gives you control over what you do with your money. Furthermore, it helps you prioritize your needs over your wants.
This is also a good time to start thinking through your long-term and short-term goals. If married, you’ll want to make sure you and your spouse are also on the same page.
2. Start paying off your debt using the debt snowball method
I’m a firm believer in the debt snowball method for paying off debt. Order your debts from smallest to largest regardless of the interest rate. After that, pay minimum payments on everything else and attack the smallest debt with everything you’ve got. Continue to the next one and repeat until you kill your debt.
If you find you’re unable to pay off the first one quickly, consider selling some of your stuff. You can also look into getting new quotes on your insurance, cutting off the cable, or picking up a second job.
3. Enjoy your new life without debt
You severed your relationship with debt. Congratulations! Now is your opportunity to pursue your dreams. Start saving for retirement, planning for your children’s education, and get to work on paying off the house!
Much of this comes from Dave Ramsey’s seven baby steps. Dave’s baby steps changed the way I look at debt and money, and they will work for you too.
Don’t let debt steal from you
Are you sick of debt? Is it causing strain in your relationships and in your family? There is hope for you. No matter what, you can seize control of your situation and put debt out in the cold.
Now is the time to act! You can get out of debt! We have a culture who tells you you can’t do it. But I believe the opposite! You CAN do this! Start taking control today and work towards financial freedom!