I want to welcome Laurie from The Frugal Farmer as my first staff writer. I know she will be able to provide inspiration to those of you still struggling with debt. Take it away Laurie!
Hey, personal finance friends! I’m so excited to be here, writing my first post as staff writer for Debt Roundup. I’m honored to be working for a blogger with such a high level of integrity and truth in his posts. It was that integrity, truth and concern for others that prompted Grayson to write his post entitled “If You Don’t Change Your Mentality, You Will Never Be Debt Free”. In Grayson’s usual “tell it like it is” style, he pointed out that it really does take a mind-flip to get you out of that spending mode and into the savings mode. I can attest to this first-hand, as my husband and I tried for years to get out of debt and save money. But we failed every single time. Why? Because we hadn’t changed our mentality. So I want to expand a bit on Grayson’s post and talk about what mentalities might be holding you back from achieving your financial dreams, and how you can overcome those mentalities and flip the switch over to financial freedom.
Being Stressed About Money is Comfortable
I know this sounds silly, but it is a true fact that people often fear change, even if it’s good change. Studies have shown that women (and men) in abusive relationships often stay because even if they don’t like their situation, they’re familiar with it, and there’s a level of comfort with that. To leave their abuser and start a new life is often much more frightening than the life you’ve lived for ten or twenty years because at least with your abuser you know what to expect. It doesn’t make sense to the “outside world”, but from a psychological standpoint, it makes perfect sense, as humans are generally creatures of habit.
We might be afraid to work toward debt freedom because we’re not comfortable living within a budget, or because we’ve never not had a paycheck-to-paycheck lifestyle. Struggling for money, in our own minds, is just the way it is, and the way it always has been, and contemplating something different can be scary.
How to Flip the Switch:
Take baby steps. Commit to budgeting and living within your means for one month. Then, for another month. Those slow changes will get you used to change gradually, and you’ll gradually see how good financial peace really is.
I Don’t Know How to Be Rich
Sometimes we have trouble changing our mentality about money and debt because we are afraid of how we might change, or how our life might change, if we become wealthy. If we’ve always struggled for money, and if everyone we know has always struggled for money, being wealthy can be scary and different. Maybe your loved ones have always had a negative view of wealth, and so it scares you, or maybe you’re just afraid of becoming a jerk if you’re rich. Maybe you’ve gotten used to constantly living in fear about your money situation and talking about that with friends and family in similar boats, and there’s a comfort level there for you that you’re afraid will go away if you’re the only financially stable one in the bunch. Whatever the reason, know that being “rich” or financially stable in and of itself is never a bad thing. It’s how you handle the wealth that causes the problems.
How to Flip the Switch:
If you’ve got fears about being rich, conquer them before you start on the road to become financially stable. If you’ve got pride issues, conquer them now. If you’ve got emotionally spending issues, figure out why and deal with the root of the problem. Are you afraid of what family members and friends might say if you become wealthy? Make a decision now to start keeping your financial information to yourself, and sharing what you’ve learned only when asked.
Becoming Financially Stable Will Take Too Long
Yes, it might. Rick and I can speak first hand to this fear. We started 2013 with a 65% DTI ratio. Talk about feeling hopeless. When we sat down and ran our debt, DTI ratio and net worth numbers, I’ll tell ya, throwing in the towel and filing for bankruptcy sounded like a quick and painless option. Instead, we chose to take the long road toward working ourselves out of debt, and I’m so glad we did, but there are still days when the journey seems like it will take too long, and we are tempted to give up.
How to Flip the Switch:
This is where the battle of the mind really kicks in. You’ve made the decision to journey on your road to debt free, and you’re reading to start digging out of debt, but you’ve got a kid-sized shovel and a hole to bury up that’s the size of an Olympic-sized swimming pool. It’s daunting, nonetheless, but here are some tips for winning that battle of the mind.
– Track your progress. Make charts, keep spreadsheets, whatever works best for you to monitor your progress. Being able to see where you were at and where you are at now helps you to have a better handle on your journey.
– Celebrate every victory. Set milestones of victory for celebration that will motivate you. A milestone for you might be that you made it through your first week or month on a budget. Or maybe it’s that you paid off your first $100 or $1000 on your credit card. Maybe it’s simply that you got caught up on your bills. Whatever the victory, give yourself the proverbial pat on the back for it, and celebrate in a fun and frugal way, then cheer yourself on to the next milestone.
– Get support. As I’ve said so many times, the mental battle is often the toughest part to paying off debt and building wealth. Find a couple of support avenues that can lift you up when you’re feeling overwhelmed. You might call a trusted friend or confidante, or you might peruse the many, many personal finance blogs out there so you can read and be encouraged by stories like yours. Just do something that will lift your mood and help you to see that you can conquer this feat of paying off debt.
Changing your mentality might very well be the toughest part of the road to financial freedom, but if you can learn techniques that will help you to get past the battle of the mind, your road to victory will be much smoother.
What mentalities did you, or do you, have to change in order to pave your road to financial freedom?
This Free Tool Helped Me Pay Off $75,000
Sometimes all you need is free! I opened a free Personal Capital account back when I was in debt and it helped me get control of my financial lifestyle. Since paying off $75,000, I’ve been able to save over $180,000 and I couldn’t have done it without Personal Capital.