Escaping the Slippery Slope of Debt

If you’re buried under a pile of credit card debt, thanks to a million random purchases, this Whiteboard Wednesday is for you.

Written by Jesse Mecham  |  on


The Boop

With big debts—like houses and cars—you know exactly how your purchase will affect your finances. But when it comes to credit cards? Those smaller purchases add up slowly until, one day, reality (your big pile of debt) smacks you in the face. That moment is called a “boop” (to use financial industry jargon).

Your boop might be an unexpected car repair or broken appliance. It could even be a less urgent purchase, like new tires. Whatever it is, the boop is your last straw. It pushes you out of your comfort zone (whatever that is for you), and the weight of your debt becomes too much.

The Good News

The first step toward financial freedom is awareness (something that many of us are surprisingly good at avoiding). And that awareness opens your eyes to some pretty important budgeting fundamentals:

When you have debt, you have far less control over your budget,
because your dollars have a job before you’ve even earned them!

And when you don’t control your budget? Life’s a lot less fun. (You can read more about how this works in our guide, Deal With Your Debt.) You can’t expect to undo several months (or years?) of credit card purchases overnight, but there is a way off of this slippery slope …

Let Intention Be Your Rock Salt

You might not be able to pay off your debt overnight, but you can pay it off faster than you accrued it—which is reassuring, don’t you think?

The key is to be very intentional with your budget. And that’s what YNAB’s Four Rules are all about! Rule 1, Give Every Dollar A Job, and Rule 2, Embrace Your True Expenses, will help you get your footing, putting you back in control of your dollars.

Shovel Your Way Out—Fast!

So, you’ve had your “boop” and you’re ready to get intentional? It’s time to get your financial heart rate up, and get those card balances down. I’m not telling you to be excessively restrictive. (Rule 3, Roll With The Punches, is important for sanity, sustainability and success!)

I’m just saying that some focused attention in the short-term (which will be uncomfortable) is so worth it. So cut back where you can. Work a little more. I want you to pay off your debt and free up your money so that you can spend it on stuff you actually care about.

Think about all the stuff you purchased with your credit card. Now think about your stress level right now. I’m guessing, and I think you’ll probably agree, that none of it was worth losing control of your money. Right?

Watch Your Troubles Melt Away

You don’t have to wait for the boop! If you’ve racked up some debt, forgive yourself and allow yourself to look at it. Take stock of your real financial fitness. (Awareness will set you free!)

And remember that, when you apply the rules with great focus and intention, you’ll pay off your debt even faster than you think. Get aggressive, be intentional about what you want your money to actually do, and then watch what happens. You’ll be amazed.

If you’d like a little help mapping out your Escape From Debt Mountain, check out The Debt Consolidation Myth: A Proven Method to Help You Get Out of Debt While Still Living Your Life.

 

 

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Your Next Step

Budgeting is not restrictive. You won’t be spending less, you’ll be spending right. So what do you have to lose? Except all that debt and stress?