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The key to reducing debt: your mental game

Both reducing debt and dieting are very simple concepts:

  • You spend more than you make and gain debt.
  • You eat more calories than you burn and gain weight.

Losing Weight Is A Lot Like Reducing DebtIf getting out of debt is so easy, then what causes us to keep spending?

Or keep eating, for that matter? It comes down to one thing: our mentality. Each person handles their finances and their health differently. We all get into debt and eat unhealthy for various reasons. Some of us spend like crazy on credit cards, some of us binge eat or stress eat. Others have their own health issues or even medical bills that still need to be paid off. Whatever the reason is, the approach you take to these separate, but very similar issues will all come down to your mental game.

You can’t out-earn bad spending habits

Eating healthy for 3 weeks will get short term results. However, keeping those habits in the long run is a much more difficult order for both your health and your finances.

The exhaustion you feel when that bill comes in the mail EVERY month asking for that payment toward your mountain of debt might be similar to how you feel when someone offers you that sugar-filled soda you know you shouldn’t have.

What I mean is that just like you can’t out-train a bad diet – you can’t out-earn bad spending habits. They catch up with us all… eventually. The key is changing your mentality to make good decisions for the long term.

Measuring Debt ReductionYou can’t manage what you don’t measure

The next step in upping your mental game is the numbers. Sometimes, just sitting down and calculating the amount of interest you’re paying on the debt is enough to motivate you to change.

It certainly was for me! My wife and I recently sat down and plugged in our school loan numbers. We realized that we were paying over $700 a year just in interest. If you have credit card debt, it could be much more — and so many people don’t even care to know.

Stay motivated by tracking progress

One way to stay motivated is to visibly track your progress. Just as some folks use apps like MyFitnessPal to track their calorie intake for their health – you can do the same for your finances. One example: writing your “debt number” on a whiteboard or mirror at home. You will see it daily and it keeps you focused and motivated.

Every Little Bit of Savings CountsWe don’t save (or eat) perfectly 100% of the time, so plan ahead

We’re only human, after all — myself included! There will be times when “life happens” and we don’t save perfectly (or eat perfectly) 100% of the time.

However, planning will help mitigate the damage of that Quarter Pounder splurge or that unexpected expense. For example, if I’m going to have a few extra beers with the guys this weekend, I’ll make sure I hit the gym hard or double down on some salads earlier in the week to make up for it.

Similarly, when I know we have a big bill in the mail that’s coming soon, we will make more of an effort to put away some extra dollars so the bill isn’t as much of a shock. Although it usually still hurts!

In the end, the financial results of reducing debt are worth the sacrifice

  • …when you have an extra $500 a month to put toward your savings.
  • …when you can pay cash for a car and not worry about a loan.
  • …when you see your overall health change for the better, both financially and physically.

You will understand the impact you have made for yourself! I know you have the mental strength to take on any challenge in your way, all it takes is a few mental tweaks!

 

June 2018

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