Living deep in debt can be an awful feeling. But it’s not all bad! Learn why this is the best time to learn great money habits.
Paying off debt is like riding a roller coaster. I mean, sure, it has its ups and downs. But the analogy goes deeper than that.
I’m talking about the anticipation of the ride. (That mix of excitement and dread!) Once you’re on the ride, you can’t always see what’s coming ahead. There’s a lot of screaming (maybe it’s joy, maybe it’s regret). And at the end, you’re happy to get your feet back on solid ground.
Let’s not talk about the people who excitedly get in line to ride it again.
When you work your knuckles to the bone to get out of debt, it’s exciting to know the magical date when you’ll be debt free. The trouble comes when unexpected events (after unexpected event…after unexpected event) pop up.
They can derail your entire roller coaster ride if you let them. They’re insanely frustrating.
Why Being Deep In Debt Isn’t All Bad
In fact, the first dozen times problems popped up and threatened to derail my own debt roller coaster, I was mad. I was upset, and depressed. And I felt like a fool for thinking I could ever break free from debt.
But now that I’m 20 months into the process, I see it differently. Yeah, we’re in the middle of another one of those Murphy’s laws. By now I know that if something can go wrong, it will.
I’m just not freaking out about it anymore. And let me tell you why you shouldn’t, either.
Here’s the thing. Let’s say you finally send in that very last debt payment. You haven’t built up any savings yet, but you’re at the clean slate stage. Time to start fresh!
But the very next day, you get blam-o’ed with a major car repair or have to replace an expensive appliance.
You’re probably going to find yourself right back in debt. Which could very well send you into a spiral of deeper debt. After all, what’s the point of getting out of debt? You’ll never escape it!
No, it’s better to learn how to deal with emergencies while you’re paying off debt at the same time. When you’re already in the habit of trudging through the quicksand of owed money… What’s one more bill?
Yes, I’m calling your debt a safety net. It’s weird. But what better time to practice avoiding debt when the worst that could happen is adding to debt that’s already there? It’s the perfect time to practice flying without credit cards.
You know you can do this!
Practice Makes Perfect
So you have a big repair to pay for. Unless you’re Ron Swanson, there will be times when you have to pay to repair or replace things in your life. Make the necessary adjustments so you know what to do when it pops up.
Can you pay this bill without using credit? Maybe you can take a quick side job (try these ideas) or live on peanut butter and jelly until you have the cash.
Maybe you even (gasp!) use all the extra money you normally send in on debt (do send the minimum payment, though!). It means a month when you don’t make any progress. But that month of practice time is worth it. Think of it as paying for an education.
Practice coming up with a plan to pay for an unexpected bill creatively rather than using your old habit of reaching for the credit card and “figuring it out later”.
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Plan For Later
This is the perfect time to start thinking about how “debt free you” would handle this problem. What would be the perfect scenario?
Your car breaks down. Do you want to panic about how you’ll pay for the repair? Of course not.
Ideally, when a car breaks down you should focus your attention on how you can get it to a trusted mechanic and get back to your reliable vehicle as quickly as possible. The cost of the repair shouldn’t be a panic point. (Though you do want to make sure you’re getting the best deal for the best repair!)
Even though you’re not out of debt yet, now is the time to imagine how much money you’d need in a savings account to cover visits from Murphy. A sinking fund may be just what you need!
You should already have a small emergency fund on hand to keep you from using credit cards now. (Dave Ramsey says $1,000, and that works for my family. Decide on a number that makes you feel safe but doesn’t prevent you from attacking debt ASAP.)
Once you’re out of debt, you should have wiggle room in your budget to fully fund that sinking fund.
Living deep in debt isn’t comfortable. But don’t miss the opportunity it gives you!
Take time to learn how to handle emergencies without panicking. Juggling debt repayment and unexpected bills at the same time can be a great way to learn how to change your life for good!
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What money habits are you ready to change?