Want To Get Out of Debt? This Is A Must Have.
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I don’t think any sane person would say, “No thanks, I like being in debt.” Unfortunately, most of us are in debt. We are looking for a way to be financially stable, take care of our needs, and who doesn’t like to have some luxuries? Want to get out of debt? This is a must have…
A debt-free life is possible and it can become a reality for you. You have to be willing to work and make some changes in how you look at finances.
You are probably reading this and became quite offended as much as Professor Trelawney when Dolores Umbridge questioned her ability to See beyond (Harry Potter reference… I’m sorry I saw an opportunity and couldn’t resist). I don’t mean work harder at work; I mean work at making new habits especially when it comes to your money. Breaking old habits and making new ones is hard work people!!
I am the first to say I have a lazy streak… Argh! However, once you decide you want something more out of life and are tired of the hamster wheel you will be surprised how much determination you can muster.
So enough chitchat, what is the debt solution I offer?
It is a book titled, “The Four Laws of Debt Free Prosperity” by Blaine Harris, Charles Coonradt, & Lee Nelson.
The book explains their four principles of debt-free prosperity in story form. I personally liked this format because it helped me put what I was learning in perspective.
It tells a story of a man named Paul Smith and his family; he has a good job, a house and a car. Everything you need to look like you are doing well but there is one small problem… Paul is drowning in debt and can’t pay all his bills. He is depressed and doesn’t know what to do so he takes a walk. He comes to a neighbor’s house where an older woman lives, one he doesn’t know well but he does know her name is Mary and he gets the crazy idea to ask for a loan. She offers to give him a $2 million dollar loan IF he can prove he could master the four laws.
Just four rules
This book offers four principles that can help turn your finances around but like I said you have to want it. This isn’t a get-rich-quick scheme… this is a mentality adjustment.
The story itself is a little outdated, about 20 years old but the laws are timeless treasures that can be applied no matter what decade or stage of life you are in.
So the four laws in a nutshell:
Track Expenses
The idea of tracking is to account for every single expense. Write it down or use excel, record everything you spend. Most of us have money falling through the cracks disappearing to Neverland. Tracking your expenses helps you find those cracks and plug it up.
[mailerlite_form form_id=2]Set Targets or Goals
Goals gives us something to aim for; to get out of debt in x amount of years, have an emergency fund to cover 3 months of expenses, save enough in retirement to retire at age 60 or whatever. Aim for specific, realistic, positive goals. Another important part is to write them down and post them in your home somewhere you will see it multiple times a day.
A quote from the book:
“In the absence of clearly defined goals, we are forced to concentrate on activity and ultimately become enslaved by it.”
(Harris, Coonradt, & Nelson, 2001)
These goals should inspire personal changes in your life because only through change can you see different results in your life. And keep going, don’t give up!
Trimming
Live on less than you earn so you can have a surplus to get you out of debt and invest in assets that appreciate. The key is to pay yourself first and live on the remainder
“No one, regardless of income, can be financially stable unless they live on less than they earn”
(Harris, Coonradt, & Nelson, 2001)
To start off “trimming,” find ways to live on 90% of your income, dedicate the 10% towards debt. You would be surprised how quickly you can get out of debt. Trim your expenses and find that 10%, it probably won’t be easy and a few concessions might need to be made. Want motivation? Calculate how long it would take you to get out of debt if you can free up that 10%.
Apply the snowball plan to your debt. The idea is once you pay off one debt, take the amount you were paying per month and add it to another debt to pay it off quicker.
Better yet once you have mastered living off of 90% of your income, aim to live off less than 90%.
Training
“The sad truth is those who spurn money, and resist learning how to use it, often spend more time worrying about it than those who took the time early on to master the principles involved in acquiring, keeping, and managing money.”
(Harris, Coonradt, & Nelson, 2001)
Never stop learning
Make your own money management training program. Learn and study all aspects of money, the more you understand the easier it will be to manage your finance and you can focus more on enjoying life.
“…we are not working on a quick fix for financial worries. Nor are we talking about a get-rich-quick scheme that requires no effort or risk. We are talking about change, a long-term change, developing a different way to look at money, changing the way we think about and act in money matters, setting financial goals with more emphasis on debt elimination, and saving as opposed to getting more things.”
(Harris, Coonradt, & Nelson, 2001)
If this post piqued your interest and desire to get going then I suggest you buy the book. I gave a pretty big highlight but I guarantee you will glean so much more from the book.
Related Post(s): Secure Your Future Series, How to Budget Your Money
Any thoughts? I would love to hear from you, drop me a comment or message!
Resources
Harris, B., Coonradt, C. A., & Nelson, L. (2001). The four laws of debt-free prosperity. Bountiful, UT: Chequemate International.
