Skip to content

Get Out of Debt, Stay on Track

[wp_campaign_1]

I experienced my first snow in Michigan this year (since we have recently moved from Florida) and it was soo cold!!! I definitely forgot how frigid it can be when the wind is blowing. Plus, my skin is so dry, I might soon be mistaken for an alligator!

As I got into my Jeep and started driving on the snow covered road, I discovered that if I stay in the tracks that were made by the previous vehicles, I can easily maneuver and avoid slipping off the road. But, if I get distracted (fuss with the radio, look back at a car for sale, or answer a phone call) and drive off from the snow-cleared track, the deeper snow would grab the tires and pull me off the road. There I would sit, in the ditch, unable to get out.

The thought of this caused me to think about my debts. If I continue to keep my eye on the prize of being debt free, I will stay on the snow-cleared tracks and pay down my debts, one step at a time. If, however, I allow myself to be distracted (look at my neighbor’s boat, new car, or incredible renovation of their house) and choose to purchase some unnecessary items, I’ll hit that snow and get torn off the desired debt free path!

If you begin to stray from your budget and avoid the debt payments, it is very difficult to get back on track! There’s a lot of damage that can be done in a short amount of time. Here’s how your mind can lead you away from your goals:

  • If I get a new car, I won’t have to spend money on repairs
  • If I get a better computer, I will be able to use it to make money online
  • If I get new name-brand shoes, I’ll probably be saving myself some doctor’s visits because they’ll be good for my fitness
  • With a new tool set, I could work some side-jobs and easily pay for them with the extra cash

Almost always, these ideas will not get us to our goal of debt freedom. Here is my take on the above thoughts:

  • Brand new cars are expensive. There are plenty of ugly older cars with great engines. You just need to suck it up and learn that your car doesn’t need to be a status symbol
  • I am currently making money with a $100 used laptop that I found on Craigslist. A new computer isn’t necessary.
  • Some shoes might claim to make you fit, but if you don’t exercise now, what are the chances that you will in the future? Slim to none. If you need some shoes, find some for less than $15 at the discount retail store.
  • If you don’t do side projects now, and you don’t have cash to pay for the tool set, leave it at the store. Keep paying down your debts.

I know paying down debt is hard. I’ve been doing it for over a year now. If you stay on those tracks though, you’ll find yourself paying off your debts faster than you’ve ever imagined. Plus, you’ll learn how to manage your money in the process! So once you’re out of debt, you’ll soon be making great financial decisions about your savings and investments. Keep it up, and you’ll be getting rich in no-time!

Money

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

60 Comments

  1. Sometimes it is difficult to pass up the new and shiny item of the moment, but you are right, if you buckle down and forgo some of the overtly frivolous items you will be able to pay down your debt, save for a better future and maybe some of the new and shiny stuff along the way!

    • Those shiny items sure are tempting aren’t they? Especially those brand new cars. I would really love to have one, but I know it would only set us back from our dreams for another year. If we stick to our plan, my wife and I could be free from debt, and own our home free and clear before 2015! After that step, investing in the future is easy! 🙂

  2. You could literally do an entire blog on how you could save money doing your own car maintenance, or assembling your own computer.
    After I learned how easy it was to replace your air filter & that it only cost $7-10 for the part, I was furious at the mechanics for charging me $30 for the “labor.” Same thing with an oil change or tranny flush. All you need is a pair of risers (that are easy to store and cost-effective) and a little bit of spare time, and you’re good to go.
    Once you know how computers are assembled, you’ll be angry you ever dropped cash down for a new one. When the processor fell off my old computer, I just took the old hard drive and CD/DVD player from it, and for about $400 I got from NewEgg had a smoking-fast brand-new computer that did circles around the old one!

    • Jason, you are so right! Changing your own oil can save a ton of money, especially if you travel often. Also, with a little computer know-how, you really can save yourself some bucks on repair. Thanks for the article ideas! If you have any more, or if you have a question, send me a message through my “Contact” tab.

  3. Definitely! You can put off all those purchases until you get rid of your debt. Once you’re debt free, you’ll also know what you can live with out. 😀

    • My wife and I are so close to clearing our debts! I’ll keep you all posted on our progress in the future. we definitely won’t go out and buy a boat or a big screen TV, but the little pleasures are still tough to do without. Things like going out to eat (we still do it, but not as often) and recreating (golf, bowling, gym memberships, etc.). These are the activities that ate up our extra money, but we are still doing well. I’m proud of my wife for doing so well with our budget. 🙂

  4. Very true! Breaking out of the debt cycle is true freedom. Hats off to you for using a $100 laptop!

    • It’s actually my most favorite computer ever! I have had no problems with it and it fits my needs perfectly. Sometimes it pays to consider the inexpensive routes! 🙂

  5. Hi Derek,

    Keep up the good work on the website. Sorry it took me so long to drop by. We miss you a lot at work. Thank you for the good tips. I’ll drop by again soon. Say “HI” to Dar for me. Good luck with the new job. Keep in touch.

    • Hi Dean! Good to hear from you, and thanks for dropping by the site! We’ll keep in touch for sure.

  6. I agree. The key is to stay focus but depending on the horizon, having a plan for some ‘nice’ spending is good for the troops 🙂

    I was on the inflation life style path for a while and when the market crashed, reality hit the fan when my company stock options dropped 🙁 I was making easy money and spending a little more than I should have at the time.

    We bought our house with a reno plan and not having the stock options made me pay the reno the hard way. So we’ve been on a diet for the past year. I was determine not to sell my investments to cover the renos. So far so good. Reno will be paid next month and then I’ll have to do some negotiations with the misses …

    • That sounds like a tough year, but great job coming out of it without touching the investments! That takes some pretty good will power! 🙂

  7. This is probably one of my biggest faults and one of the reasons I got into the debt that I’m into in the first place. I have a habit of wanting new shiny things, especially tech gadgets. When I decided to get out of debt, the first thing I had to change was my thought process concerning purchases. Nice analogy.

    • I think it’s hard for almost everyone LaTisha. We all have the urge to have the best of the best, and sometimes, it’s just fun to know that people are envious of you too! But, once you get over those feelings, debt-freedom is just around the corner.

  8. Good post, and good tips. Now, I do think it’s good to be careful with shoes, as not all are made of the same quality. Sometimes it pays to invest in quality. But I totally, 100% agree on the concept of buying a new car. It’s a status symbol that’s really empty and convoluted. If we spend more money on a nice car, to make it look like we have money, we’ll actually have less money in the process of making the big purchase!

    • You’ve got it Squirrelers! Paying a little extra for quality makes sense sometimes, but paying a little extra for status is not wise. I’m always amazed at how many people try to look wealthy, but they’re in fact more broke than most of their friends. They’re found out eventually when it’s time to retire, and they’re still working.

  9. The main thing I’m wondering, is why you would move from sunny Florida to frigid Michigan? 😉

    • Haha! That has been the main question. My wife and I decided that family and friends are more important than sunny beaches. Also, we kind of missed the seasons too! We’ll be here for a long time! 🙂

  10. >>If I get a better computer, I will be able to use it to make money online

    That is only 1% of why I’m getting a new computer. I get a discount on Dell’s through work; almost $200 off the system I’m looking at. I need to upgrade my processor & RAM because it isn’t upgradable (I bought it off someone and it’s some odd configuration that doesn’t have slots for RAM).

    I’m also planning to dump Dish TV ($50/month) and go to streaming TV shows through Hulu and the network sites. My computer will “pay” for itself in about one year. I don’t forsee a need for Netflix or Hulu premium right now; I barely watch movies as it is.

    My mom had a leftover digital converter box, so I’m hooking that up for the local channels. I’m in the testing phase of doing all of this (converter box picks up 18 channels, my current computer is farrrrrr to slow to stream a 5 min clip on YouTube, let alone a full episode of something).

    Is it a splurge? Not really, not when I’ve been wanting to toss my computer out the window for at least two years, and I’ve been toying with the idea of dropping cable for several months. Plus, I have my tax return earmarked for this expense 🙂

  11. What you say makes sense and can be applied to everything in life. I appreciate the post because it helped me stay on task today and not get pulled into the snow. 🙂

    -Ravi G.

  12. I so wish young marrieds would have to read your blog. You show wisdom in your posts that could help them avoid the debt trap.

  13. Need some re-direction.
    Had about $1200 in the Emerg. Fund.
    A kitchen floor fix become a must(old house).
    Had to use the emerg fund for labor/material.
    Emerg fund at about $200.
    On a roll with paying off debt.
    Should I ease up on the debt paying and replinish
    the Emerg Fund back up to 1200-1500.
    Need to make decisin by 05/26/11. HELP.

    • Definitely hault the extra debt payments and replenish that emergency fund. If you don’t, something else could happen, and then you’re stuck paying the debt you created to pay for it, plus interest!!

  14. Excellent post…

  15. So we’ve been on a diet for the past year. I was determine not to sell my investments to cover the renews..:)

    • Sounds like you’re being very consciencious about your savings/investments! Good job!

  16. Of course, new laptop isn’t really necessary, but you have to keep it updated so it can keep up with the work your are doing online. Great article here. Really need advice in making wise investment and decisions. Thanks

    • I’m still using my relic of a computer. It still does a great job too! I just made me another $2,500 this month! 🙂

  17. First thing I had to change was my thought process concerning purchases. Nice analogy. 😛 thanks!

    • I’m glad the article could help!

  18. you really are right!!! your article really did help me alot!! thanks to you, know i have the right motivation to clear my records and stay on track again!! i love this post! thanks!!

    • I’m glad I could help you out with this one! Good luck paying down those debts!

  19. I do think it’s good to be careful with shoes, as not all are made of the same quality. Sometimes it pays to invest in quality. But I totally, 100% agree on the concept of buying a new car. It’s a status symbol that’s really empty and convoluted.

  20. Definitely hault the extra debt payments and replenish that emergency fund.

  21. This is great.. We can never avoid debt!But we have to lessen it.. Thanks for sharing this to us!

    • Oh debt CAN be avoided. Once my wife and I pay off our house, we never plan on being in debt ever again. And think about it, if there’s no mortgage, it would be pretty easy to avoid debt.

  22. Your title just struck me, I want to get out from debt and still turtle paced working on it. I have to make both ends meet at the same time pay off some of my debts. I know I can get out from this slowly.

    • That is the sucky part. It’s going to happen slowly. But, it WILL hapen. Keep up the good work!

  23. Good to know your blog..Very nice and awesome blog..Thanks|! | 😛

    • Thanks for the kind words! Come back soon! 🙂

  24. Definitely hault the extra debt payments and replenish that emergency fund. | 😛

  25. I would really love to have one, but I know it would only set us back from our dreams for another year.

  26. Great article here. Really need advice in making wise investment and decisions. Thanks.

    • Glad I could help! Come visit us again soon! 🙂

  27. I was recently out of work because of downsizing and never expected I was in the list. I was taken aback when my name was called. I was not ready since I have so much debts to pay. Now with all what I know, gathering all what it is to help augment our daily needs and to pay off my long time debts, I am slowly paying off some debts of mine.

    • That just sounds horrible. Kudos on not rolling over and calling it quits. It sounds like you’ve really attacked life and survived. Not only that, you are now paying off your debts! Awesome!

  28. I have the right motivation to clear my records and stay on track again!! i love this post! thanks!! | 😛

    • Glad I could help you out Nathan! Don’t forget to subscribe! 🙂

  29. I have the right motivation to clear my records and stay on track again!! I love this post! thanks!! | 😛

  30. I was recently out of work because of downsizing and never expected I was in the list. I was taken aback when my name was called. I was not ready since I have so much debts to pay. | 😛

    • Are you starting to take debt more seriously now? What has been your experience since then?


Add a Comment

Your email address will not be published. Required fields are marked *

Related posts