In the blog, Living in Captivity, we were able to analyze our current situation and recognize whether we had been taken captive by the debt monster. If you realized you were a taken now is the time to plan your escape.
- Admit you are in captivity and understand there is no “good debt” – The first step to achieve anything is to first admit that you have a problem. If you don’t see that you have a problem and are content with your financial situation, there is no need to do anything. The definition of debt clear. If you have borrowed money and you owe someone you are in debt. However, in society it is a tricky topic. There are all these talks of “good debt.” I would argue that there is bad and “not so bad debt.” I have heard business debt, student loans, and mortgages are all good debt for various reasons. Some argue in support of them for the tax savings. I have been advised to keep my lower interest loans in order to invest in the stock market instead. Both of these reasons are risky as tax laws change all the time and we all know the stock market has no guaranteed return. Those who look at you strangely and question you for to be totally debt free mortgage. Warning you have to question the motives of who is talking. We have almost been brainwashed about debt that it is good. When we are the only generation in the history of humanization that carried significant debt and thought it was good
2. No new debt: This one seems pretty straight forward; however it is one I must touch on. I was teaching a financial class and I was about a third in when a student raised their had and asked the question. So when do I stop using my credit card? I had made an assumption they that not taking out any more debt was understood. I won’t make that same mistake here. To get out of debt even in the planning stages you need to stop accumulating debt. If you are using a credit card to pay your normal living expenses and not paying it off fully every month you are still accumulating debt. That means you are spending more than you are making. The solution is to increase income or decrease your expenses. to stop accumulating debt immediate.
3. Commit to freedom: Make up in your mind that you want to be free and that you will be free.
4.Find some weapons: The Debt Monster is strong and doesn’t want to let you go. He loves how hard you work everyday to make him happy. You make him feel good when you pay him his fees and interest every month. You will have to get your mind together start gathering your weapons. You weapons this time are educational resources, support groups, accountability partners. The Word of God, Dave Ramsey, Suze Orman, Dfree, Millionaire Next door
5. Pull the trigger: Its time to pull trigger and let the Debt monster know he has fight on his hands. That you will now longer silently remain his slave.