Who doesn’t want to be on the debt freedom highway, right?
I know that when we were in debt, I would have done anything to speed up becoming debt-free. Okay, nearly anything – I would have drawn the line at selling my soul to the Devil.
Traditional personal finance will tell you that to get out of debt, and fast, you must work out how much debt you have and the three debt ratios that will allow you to decide how to deal with it. Yes, you must do all that and if you are still in the dark go and do it!
Today, we are not going to talk about the technical aspects of paying off debt and becoming debt-free but about the mentality behind all that you do with your money. Mentality, your beliefs, attitudes, feelings and values, are crucially important when paying off debt and aiming to pay it off in record time.
When I first realised how much debt we had, I also understood what the saying ‘my world collapsed’ really meant. It is like someone has put out the light of your life; like someone has built big, tall walls around your present and your past and future don’t exist.
You look at your life partner and see betrayal; you look at your parents and see shame, and you look at your children and see deprivation for generations. So I understand that you want to get on the debt freedom highway and pay off your debt at the speed of light.
When I was where you are today, I didn’t understand one simple thing about getting to debt freedom fast – winning against the debt required a dramatic change in the way I thought about it. In other words, I had to change my mentality and attitude.
Here are three easy mental shifts to get you on the debt-freedom highway.
Debt Freedom Highway Mental Shift #1: From ‘debt’ to ‘negative wealth’
Do not let the debt get you down and upset you to a level where you are stuck in a negative cycle around money and not having any.
Allowing this to happen is a sure way to view debt as shameful (there are enough people who will try to make you feel somehow inferior for having debt anyway), and debt busting as a Sisyphus struggle – not good. Remember, Sisyphus continued pushing the rock up the mountain not because he was so strong-willed but because this was his punishment from the Gods; so he had no choice.
When moving towards debt freedom, you have a choice – to keep going or to fall off the wagon and this is something you don’t want to do. Interrupting your debt freedom journey will only increase your self-loathing.
How to change your attitude toward debt?
Our thoughts (and the way we express these in words), our emotions and our actions are a unity. So, one way to change how you feel about debt is to change the way to think about it.
I, for instance, started calling our debt ‘negative wealth’ – technically it is correct because by reducing your debt you increase your wealth. When I started calling our debt ‘negative wealth’, someone asked me whether I call my savings ‘positive debt’ which completely missed the point. And the point is:
Calling your debt negative wealth shifts your attention away from ‘debt’ and towards ‘wealth’. It feels better and puts a positive spin on all you do to pay off your debt.
Try it and you may be surprised how this wacky mental shift changes the whole perception of your money situation.
Debt Freedom Highway Mental Shift #2: From ‘gazelles’ to ‘tigers’
Don’t get me wrong; I think that Dave Ramsey is one of the smart people in personal finance – I think that of anyone who has helped, and is helping, so many people get out of debt.
There is one thing, I believe, he got wrong and by people repeating it, and adopting it, that causes damage and keeps you off the debt freedom highway: the gazelle intensity clause. This is where Dave explains that to get out of debt you must develop gazelle-like intensity and focus.
What is the problem with that?
The problem is that when you develop gazelle intensity you become prey. You may eventually get out of debt, but you will never win the money game if you become, and stay, prey.
I believe it is better to develop the focus of a tiger; then you are a hunter, not prey. Becoming a tiger and ‘hunting’ with extraordinary focus and purpose is what will get you out of debt and help you win.
Debt Freedom Highway Mental Shift #3: Forego convention
Most of us act in accordance with what is conventionally seen as appropriate behaviour.
Nothing wrong with that – most of us spend most of our lives not wanting to attract attention. However, keeping within the confines of the ‘acceptable’ means that we strip ourselves of the creativity we need to ‘jump’ and are likely just to try to run fast.
If you want to get out of debt and change your financial destiny you need to learn to ‘jump’, and must learn to forego convention.
Tim Ferriss helped me do this by the examples of ‘crazy’ awesome stuff he does as exercises. I tried my own ‘crazy’ stuff – and I knew that I am winning when I was standing at the bottom of a ski slope asking people to sell me the day passes they no longer needed for half price.
And this was only the beginning :).
Final words:
In a drive to be ‘objective’, the mentality is often underplayed in personal finance. I found that it is as important, if not more important, than the numbers, ratios and spreadsheets.
Try it! What do you have to lose?
I think his metaphor means that as a “gazelle” you are supported by your herd, quick, responsive, alert and being fast on your feet. Most gazelles are not predated because they are so agile. They eat every day – as they need to to be so quick. When in the “Debt Busting” phase you need to be aware of everything, responsive and quick to make decisions to get you out of danger…… and it works so much better if you have the support of those around you. These are the debt fighters who have a plan, stick to a plan and it keeps them safe.
Tigers on the other hand – only make a kill once for every ten attempts (Feast or Famine) and don’t eat every day, indeed they spend most of the day asleep. They are solitary animals – unlike other cats, like lions – so don’t have the close support of a group of their kind. These are the debt fighters who think they can do it all on their own and are gambling on a big win (successful hunt) to resolve their problems.
But if your point is that you should move from thinking like a “victim” about your debt then I am all for that – thinking like that is very detrimental to your tackling your debt with any clarity as you are be definition refusing to accept that you are responsible for your own position.
Just my tuppence worth 🙂
@Elaine: OK, you have a point here, I’ll admit. Mainly about the support from others (we couldn’t have done it without the wisdom, support and tips of the Matrix. I still object to convincing people to identify with ‘prey’ – hunters have to possess all characteristics you listed, and then more. Shall we agree on lions (they leave in groups) :)?
I couldn’t agree more with some of the points made here. Its so easy to let debt get on top of you and for it all to become too much. I got to that point once (when I liked the horses a bit too much) and it nearly beat me. In the end I did something similar to this article, in turning my train of thought around, picking up the pieces, and making money work for me. This can onoly happen when you get your mind out of that debt hole.
@Wild about Finance: Thanks for stopping by and glad that you turned your financial life around; and that your experience and mine are in line – you have to become a hunter to win the money game.
The biggest obstacle we’ve had to paying debt since we got serious about it is being able to weather financial storms. We had the $1000 emergency fund that Dave Ramsey recommends, but $1000 just isn’t enough. I just wrote a post today about increasing it to $3000. Looks like we are both disagreeing with Ramsey today!
@Edward: I did find this hard at some point as well – my need for security and my desire to get rid of the debt fast were sparring and the victor was unclear. At the end paying off the ‘negative wealth’ fast won – we don’t have an emergency fund and I tent to agree that the biggest emergency is needing an emergency fund. If you have the cash flow to throw quite a bit of money on your debt every month, the only thing an emergency will do is slow you down a bit. However, I am thinking about this one as a Brit and realise that in the States you need something put aside for medical emergencies as well.
I feel like I should be listening to “Eye of the Tiger” as I read this. Good motivational speech.
I think some people get really depressed about their debt because they see it as a hopeless struggle. Typically it’s just a bad attitude (of course there really are some situations where a person has a legit revenue problem and there’s no way to resolve the situation no matter how much they pinch pennies).
@Joe: Welcome, Joe, and very pleased to see you here. Now that you mentioned it, yes, I probably should have linked to ‘Eye of the Tiger’ – appropriate at so many levels. I will go a step further from what you said and argue that even when the debt situation is very serious attitude is very important and that very few get out of debt (and stay out) by ‘pinching pennies’. Usually it is about developing healthy money habits of not wasting but maintaining your life lush, and increasing income.
I like the idea of foregoing convention. I just made a pretty “bad” decision, leaving my job without another one lined up. I feel great. Who knows how I’ll feel in 3 months when my student loan payment savings dry up and I realize that I haven’t been aggressively paying down my debt, but something tells me that this adventure could be the beginning of new creativity and great ideas!