If I could go back in time, these would be the reasons I would tell my younger self to start paying of my debt TODAY.
1. Get Rid of Anxiety About Money
Do you find yourself worrying about money a lot? Are you constantly thinking about “what if” or “some day”?
Anxiety about money can cause major harm to your mental health, sleeping patterns, eating habits, and relationships. An article on CNBC in 2017 shared that 78% of US workers live paycheck to paycheck, with the breakdown being 81% of women and 75% of men. It doesn’t have to be this way.
You can’t imagine the freedom you will feel when you finally decide to pay off your debt and plan for your expenses.
2. Shift Your Focus From Possessions to People
Right now, I bet you have at least one running list of things you want to buy – an Amazon wish list, links to products in your Evernote, a mental list of items that caught your eye.
How about a list of people you want to keep in touch with, pray for, hang out with? I don’t mean social media. I mean a mental list of people or list in your journal that you intentionally remember and love. No?
Take a moment to think about that. Which of those categories will last beyond this life on into heaven? It certainly won’t be your Lululemon leggings or your Apple watch.
But that conversation with one of your good friends, Karen? It could have eternal significance. Shift your priorities from expensive, unneeded STUFF to experiences with people.
3. Stop Being a Servant to Your Money
Every time you think about getting ahead of your bills, you find something else you want to buy and add another bill or two to the list. You’re basically an indentured servant with heckin’ stylish shoes (probably about 10 pairs too many) and an expensive apartment (or, God forbid, a house that you cannot afford).
Close your eyes and think for a moment about a life that may have significantly less shoes but NO DEBT. What would you do with all that extra money? Travel to Spain? Start investing? Start that business you’ve always wanted? Help out a friend when they fall on hard times?
That’s freedom. Set yourself free from your debt and start living the kind of life you want.
4. No Lump Sum Surprises
YNAB (You Need a Budget) is a budgeting program that has four rules for taking control of your money. The number one rule: Give every dollar a job. That means you take every dollar earned and assign a category or job to each dollar.
When you start to follow this rule, two things happen. You have a wake-up call about the limited amount of money you have, and you plan better for the future.
When you think through every expense you may have to pay in the coming months and years, you can create long-term goals that help you slowly fund large expenses. With a budget, you will never be surprised by a lump sum expense again.
5. Become a Good Steward
Jesus told a parable about “talents”, which was a form of currency in his day. He said, “For to everyone who has, more will be given, and he will have more than enough. But from the one who does not have, even what he has will be taken away from him” (Matthew 25:29).
This seems pretty harsh, until you stop and appreciate the wisdom behind it. When a person is entrusted with a lot of resources from God and that person responsibly pays off debt, tithes, saves, gives to those in need, and invests, it makes sense that God would honor that person with more.
Maybe you need to take a leap of faith and start seeing every penny earned as a gift from God. Trust in his power to multiply your faith and your resources for his glory. The first step is paying off your debt. It may take a long time, but it will shift your focus from spending to saving, and that is the beginning of a blessed financial life.
6. Learn to Live Below Your Means (and Build Wealth)
Everyone wants to be rich. The truth is, most people don’t stay rich. They never learn the principles of building wealth wisely, so they tend to spend it all, even millions of dollars.
This may seem insane to the average person who makes about $30,000 a year. But imagine getting a $100,000 raise. Wouldn’t you start to justify a bigger house, a nicer car, brand-name clothing, the best technology, bougie vacations, etc.?
This is called lifestyle creep. With every raise, we start to adjust our lives to it so that we continue to live paycheck to paycheck.
If you don’t make very much money and are single and young, you are in a fantastic place. You have the unique opportunity to learn exactly how much money you need to survive. You may be shocked to find that you could live on $15,000-20,000 per year. With that extra $10,000-15,000, you can pay off debt quickly.
7. Multiply Your Possibilities Instead of Your Debt
There’s a secular term for the type of money I want to talk about here: F.U. Money. I’m not particularly fond of that phrase, so we’ll call it Freedom Money.
The idea behind Freedom Money is that you live below your means, pay off all your debt, and then work really hard to build wealth through different revenue streams. Once you reach a certain amount (typically a lump sum that you could live 4% on so that it continues to grow), you can start living the kind of life you want.
The point is that the possibilities start to multiply (as opposed to your debt) when you have Freedom Money, such as being able to work from home doing something you love, quitting your job to backpack around Europe, going back to school for more education, or starting your own business. When you put your money to work, your possibilities grow, and that is huge motivation to take control of your money NOW.
8. Vote With Your Dollars
I personally haven’t seen the benefit of voting in elections for a President I will never meet (I still vote, but whatever). I believe change starts from the ground up and that individuals have more power to change things than they may believe.
One of these ways is by how you spend your money. If you live paycheck to paycheck, you probably are too anxious to even see beyond your bills and your debt. You probably buy the cheapest food possible or else charge it and forget about it until your credit card bill comes. (Don’t worry, you can stop this cycle!)
When you stop living paycheck to paycheck, pay off your debt, and start saving, you stumble upon the unique opportunity of voting with your dollars. You have the power to research companies and invest in their stock because you believe in their mission and values.
9. Build Your Self-Control
When you start to pay off your debt and practice self-control in your spending, you will be shocked to see how the other parts of your life follow suit.
A few months after we started paying off our debt, we joined our friend’s CrossFit gym (we paid for our memberships by cleaning it once/week…a pretty sweet deal) and started working out 4-6 times per week. We also drank less alcohol, stopped eating so much fast food, and stopped watching so much television.
10. Think About Cost vs. Value
Paying off debt gives perspective on the value of things.
My education was expensive as heck. Was it worth it? I truly don’t know. My parents paid payments to the school, I worked three jobs, and even then I had a chunk of student loan debt after I graduated. I make an average amount of money and I’m not working in the field of my major.
Stop and think through every purchase you make, especially the big ones that have lasting impact. Think about its value to you in proportion to its cost.
11. Value the Possessions You Own
Paying off your debt instills a thankfulness for your current possessions.
You will do things like:
Start to take care of your clothing with a steamer and stain remover.
Savor your home-cooked meals.
Opt for plants you can grow instead of the millionth decoration piece you will hate in 6 weeks.
Hang pictures of your family and friends instead of generic inspirational quotes like, “believe in yourself” or “live laugh love.”
Organize your closet space and throw away those 10-year-old tubes of acrylic paint you bought when you were feeling artistic.
12. Find Joy Apart from Money
I think about my joy in terms of my purpose now. Before, when we had debt and I struggled with my spending, I was searching for joy in my money. It’s weird how when you have less money, you think that all joy lies in the ability to spend more money. This is why so many people opt for credit cards and justify going in debt.
When you pay off your debt and you practice self-control, you start to find joy in simple things. You can breathe a little easier and smile a little more. That ache to spend money sort of quiets to a still, and you can pray to God with a thankful heart.