Over the past few years my wife and I have intentionally been paying off all personal debt. We eliminated a lot of debt, from credit cards to school loans. Currently we attacking our mortgage. As our debt continues to dwindle, we have noticed a few benefits.
Benefits of less debt
Less stress. Less stress when bills arrive. Less arguments about money. Less pressure to get that promotion. Less stress when dealing with life’s surprises. Less stress with every purchase.
More freedom. More freedom to be generous. More freedom to leave a job you don’t like. More freedom to enjoy hobbies. More freedom to pursue creative interests. More freedom to be intentional with your own resources.
More control. More control over how you spend your time. More control over major life decisions. More control over your long term financial health. More control over your daily cash flow.
The benefits are nice. Reaching these benefits is not too difficult. Here are a few tricks that helped us reduce debt.
How to get less debt
Despise debt. The first trick for us was to change our mindset towards debt. For years we did not think debt was a big deal. We found ourselves repeating maxims almost subconsciously:
- It will not take us long to pay off this purchase (spending money we didn’t have).
- That promotion will come through in a few months (spending money we didn’t have).
- School loans provide a nice tax write off (debt is normal).
- Everybody has a mortgage (debt is normal).
Once we decided to treat debt as an emergency instead of a tool, the tactics were simple.
Track expenses. Creating a simple monthly budget and tracking expenses has paid off. At the beginning of every month, for at least five years, we have done a quick review of our budget. Awareness goes a long way.
Reduce expenses. Finding opportunities to reduce monthly expenses was easy once they were all tracked in a spreadsheet. In some cases, specific expenses were reduced or eliminated. In other cases, we were able to identify high spending areas and change our behavior moving forward.
Save some. Before actually paying off any debt, we set aside enough money to cover unforeseen expenses. This step was critical. It was impossible for us to make progress when a credit card (ie. debt) was the only way we could pay for emergencies.
Start small. Paying off our smallest debt first freed up extra monthly income that we could use to double down on another debt. This created momentum that became somewhat addictive.
Earn more. Like me, you likely have a primary source of income to cover ongoing expenses. Debt reduction can be accelerated by pursuing other sources of income. One source was selling excess things we no longer needed. A more steady source of income was making money from a side hustle.
Debt can take over and control many aspects of our lives. I prefer to control debt. I prefer less debt.
About The Author
John MacAdam is a Professional Engineer and mobile app developer from Columbus, Ohio. He is currently writing about Living with less and Growing a side business. Join the private email list to be notified of new posts.
This article was originally posted at macadam.blog/debt