Debt

[det]noun

something that is owed or due.

A few years ago, I was in serious debt. Financially, yes, but I now realize that putting yourself in debt can go way beyond money issues. 

The simple definition of debt is something that is owed or due. 

Like a lot of people, my approach to debt was to focus on instant gratification, and to ignore the long term affects. I was quick to use a credit card when I didn’t have the cash. Eating junk and drinking alcohol with no regard for what those things were doing to my body were regular occurrences. I would stay out late, and have to wake up early for work, assuming the sleep I was getting was enough.   

I trusted that I could manage the hole I was digging myself into, and that each little bad decision was not that big of a deal. 

“What’s $50 here and there in the grand scheme of things?”

“I’m not overweight, two more slices of pizza won’t kill me”

“Another beer is a good idea”

The cognitive dissonance was real, and the hole I was digging was getting deeper by the day.

The Real Story

In reality, $50 here and there added up to $15k in credit card debt. Even though I didn’t feel much heavier, I was overweight, and the pounds were increasing at an alarming rate. And finally, another beer was *never* a good idea for me. 

Like with a credit card, all debt comes with monthly interest. These hidden fees are what really hurt over time. It can feel like you are forever treading water and before you know it, quickly drowning. 

The weight I gained was not entirely from those two extra slices of pizza, but combined with the first three led to a problem. 

Alcohol has the highest interest rate. The buzz from drinking clouded all of my awareness to the damage I was causing myself. Socializing at an open bar for hours led to mindless drinking that I only noticed the effects of the next morning. 

All of these seemingly inconsequential decisions put me in a significant rut, and I didn’t know which vice to blame or where to start. 

No vice was at fault. I was the one digging my hole, not the shovel.

I get it. No one wants to live a life of 100% discipline and cut out all joy. But there is a way to strike a balance. Here are a few tactics that have worked for me:

Freedom from Debt

Take Inventory

It’s important to understand what you’re up against before you can make any improvements. With financial debt, you need to see where you are spending the most and what interest rates have the biggest impact on your bottom line. Self-improvement is no different. What are the biggest issues you want to tackle? What areas are having the largest impact on your success or lack there of? 

Pay off Bad Debt as Fast as You Can

In the personal finance world, there is good debt (i.e. mortgage, investing in yourself) and bad debt (i.e. credit cards, car loans). The “good” is defined by something that can build wealth over time whereas the “bad” continues to send you backwards. Paying off the bad debt as fast as possible levels the playing field and allows you to move forward. 

I decided to push myself for a month, cutting out alcohol and over-processed food. I was active every day and I went to bed at 10pm. The first few days were an adjustment, but ultimately, I was making healthier decisions, so I felt better almost immediately. The mental aspect is what took the most work. I needed to adjust my routines and remind myself that it was only a month. 

After the 30 days something unexpected happened. I wanted to keep going. Feeling and seeing improvement made me want to continue. The sacrifices I was making (good debt) were eliminating the damage I had done to my body (bad debt). 

Pay Yourself First

My father always taught me to pay myself first when receiving money from a job. His sound advice referred to putting aside some savings, but this rings true in other areas of life as well. Temptations will arise every…single…day. Putting in the hard work first allows you to indulge a little later on. 

If you know you have dinner with friends, eat a light lunch. If you have busy day scheduled, wake up early and squeeze in some exercise before the first meeting. Doing something hard but positive for yourself first will not only give you the freedom to enjoy some luxuries but you may actually find that you are better off without them. 

Rewards Program

One of the best pieces of financial advice I’ve read was from a book called I Will Teach You to Be Rich. The author, Ramit Sethi, says to take full advantage of credit card companies. There are tremendous offers out there for free money if you use credit cards properly. I signed up for a card with the best points system available and use that card every chance I get. The key is to pay it off fully every month. This way I am never charged a fee, and I reap all of the benefits. 

Life offers rewards like this as well. What is going give you the highest return on your time investment? 

Think of your body as a credit card used to enjoy life. With exercise and better eating, it is paid off on time and you reap the benefits. Same goes for the brain. Spending time reading, meditating, writing or on a hobby can act as “payments” by stimulating your mind.

Committing fully to an activity or mindset that leads to the biggest payoff will keep you ahead and offer the quickest path to growth.

Stick to the Plan and Remain Debt Free

Consistency is key to success. This is a long term game and being free of debt is not always easy. But I promise if you stick with the process, you will be able to clearly focus on what matters most to you, and live the life you want.