When we are faced with the grim prospect of debt, our mind automatically goes into panic mode. We try to find ways to make extra money, or we frantically scramble for as much money as possible, thinking that we have to deprive ourselves to really escape that debt.
In fact, even though eliminating your debt is an incredibly stressful process, one of the great things that can be underestimated at this point is your mindset. Ultimately, your mindset can determine how successful you are at either reducing your debt or getting rid of it completely.
If you have a very negative approach to handling debt, this could hamper your chances of creating a plan. But this is why you have to have the right mindset. What are the best approaches to a mindset that can help you get out of debt?
Viewing It As An Obstacle, Not A Burden
Many of us view debt as a weight upon our shoulders that we may never escape. However, if we view it as an obstacle, this can help reframe it in a more positive method. Many people feel they have no choice and end up filing for bankruptcy because this weight gradually gets heavier over time.
Instead, by looking at your specific issue as an obstacle, you are more focused and determined to create your own payment plan. For example, if you owe money towards your credit card you can not simply rely on only paying the minimum every single month. You will never get out of debt that way.
Taking Control Of Your Mind And Then Your Money
In order to get out of debt, you need to create your own plan so you can take control of your finances. Yes, you are paying out more in the short-term, but in the long run, you will see those monthly payments decrease exponentially!
As far your mindset is concerned, by viewing debt only as a burden, it can cloud so many aspects of your thoughts. To tackle our debt, we need to convince ourselves that our debt is not going to stop us from living our lives. We are going to grab our debt by the horns and take control once and for all.
There are an unlimited amount of stories about people who have gotten out of debt quickly. Yes, they made significant sacrifices, but by keeping their mind firmly set on their end goals and dreams, they were able to accomplish much more than they ever thought possible.
Keep Your Focus On Your Goals
Simple in theory, harder in practice. In life, we have so many different things coming at us, that staying out of debt can be harder than we imagined. When you keep focusing on getting rid of your debt and making this a priority, you aren’t going to be as inclined to miss payments.
Ultimately, knowing what happens when you miss these payments can be a harsh reality to spur you on. We have to look at it as a pathway. Every bit of debt we pay off each month is a step towards financial freedom. When we are in over our heads, having this focus will keep us on the road. And to get on this debt-free road, you need to hold yourself accountable. Accountability is what keeps us honest.
We spend so much of our time blaming credit card companies for giving us these cards when we didn’t have to use them in the first place. Yes, there are things you can do, such as asking for help or contacting the card companies to negotiate different payment plans, but ultimately, it is up to you to get out of debt.
By staying focused and keeping your debt elimination goals firmly in your mind, this will carry you through.
Being Debt Free Is Not Beyond Your Reach
We can sit on our hands and think that we are helpless to change anything. But as far as getting into the right mindset of debt reduction is concerned, if we use delay tactics, we will never get out of debt.
We have to convince ourselves that it’s never too late. A lot of people feel that they will be able to get out of debt when they make more money. But, much like any problem we have in life, the sooner we face it the better chance we have at actually making a plan and finding a solution to our problem.
People might feel that they are going to be in debt for the rest of their lives. If you do nothing at all, this debt will increase because interest rates will forever rise. If you decide to start paying off your debt right now, however little it is, you’ve made the first step towards being debt-free.
It’s never beyond your reach, but you have to want to pay it off. Minimum payments are all well and good, but if you have a desire to be debt-free, either because you have a goal in mind, or you are fed up of missing out on things, this can be motivation enough.
Wrapping It All Up
Getting out of debt will teach you valuable lessons along the way. Some people finally get out of debt and immediately start overspending with credit cards. During your debt-free journey, you should do everything in your power to avoid taking on more debt.
If you have problems with motivation, realize that the best method may be to tackle the lowest debt first. This system will give you a better chance of paying it off completely.
This is known as the debt snowball method, and once that lowest debt is paid off, you progress to the next one and keep going. This is a perfect way to give you motivation. Many people try to pay off everything at once, and while it can be done, it takes a ton of personal drive and sacrifice.
Debt is extremely crippling, both financially and mentally, but when we think of the best method to get out of it, mindset is the key component. Your mindset will be the difference between you getting out of debt or paying off the minimum balance and sliding back into debt after a couple of months.
For more info, here is a great TEDx talk on motivation and mindset: