A Debtless Life
Life is tough. You work hard every day. You deserve a break. You deserve that exotic vacation, fancy car or new phone. You deserve it. You deserve “the good life”. Treat yo-self!
Ahhh consumption narratives. Aren't they just so tasty? Don't they have a delightful mouth-feel (gag)? It's just so easy to lean in and agree, no? Life IS tough. I DO work hard. I DO deserve “the good life”! I’m GOING to treat myself!
Even when we maybe shouldn't be treating ourselves. Even when we maybe can't afford to say yes to “the good life”.
The fact is, sometimes we buy things we can’t afford. Sometimes we behave in ways that are counterproductive to our long term goals. And sometimes we wrack up a lot of debt because we want to say “yes” to a lifestyle that’s beyond our means.
Well folks, the time has come, we're going to dive into the topic we all love to ignore and hide in our dingy basements away from the light of day. It's time to talk about debt.
Normalizing Our Way To Debt
Debt is wildly common, but it wasn’t always this way. It wasn't that long ago (our grandparents’ generation, if you're a millennial - I can't help you gen z) that debt was avoided. With the debt-fueled stock market crash of 1929, people were not comfortable with carrying debt. But consumer narratives and attitudes started to shift in the postwar era of the 1950s. It was not so much that debt became “acceptable” but more so that consuming goods was what good citizens did.
From there, the second half of the twentieth century was a kaleidoscope of economic booms and busts. Shifting economies, the rise of consumerism, and the economic growth that came with it. Over time this led to more credit, more lending, favourable rates, and the normalization of having debt. It’s not uncommon to have a large mortgage, a car loan, perhaps a line of credit and to carry some sort of balance on a credit card or two or three. Most of us have some form of debt. It’s normal.
But is it? Yes, taking out a loan for a large purchase (like a house or education) is extremely common. But the more debt you accumulate the more quickly new clothes, a bathroom reno, a luxury car, a trip you can't quite afford transforms into stress, fear or shame.
Shame, Isolation And Debt
I would argue (along with Brene Brown) that shame is one of the most dangerous emotions out there. Shame is different from similar feelings like guilt. Guilt is feeling bad for doing something wrong (or perceiving that you did something wrong), shame is the feeling that your whole self is wrong for doing that thing.
If you - you amazing, magical human you - feel like your internal self is wrong for making a decision or behaving in a certain way, it can have a devastating impact on your self-esteem and mental health. And when it comes to debt, shame is like the Robin to your debt’s Batman.
In fact, we can become so embarrassed and shame-filled about our money troubles that we hide it from our friends and family, even our partners. We often feel regret, embarrassment, and even fear, and these emotions ultimately isolate us from other people and the needed support to address debt.
Though it might sound all doom and gloom, the important thing to remember is that debt is extremely common. Almost all Canadians have debt. Canada actually ranks as the 3rd most indebted country, based on household debt, in the world. Why do I share this somewhat depressing stat? I share it because it's important to acknowledge that though having debt can feel isolating and stressful, you certainly are NOT alone.
And I know it’s tempting to just pull the covers over your head and let the warm waters of isolation carry you off into a dream land filled with ice cream and Bachelor reruns. But when it comes to debt, ignoring it is about the worst thing you can do. Which means, you need to face it.
Attacking Debt
Join me, as we walk down those rickety basement stairs and shine a bright light on your spooky secret (no, not your 15th century battle reenactment larping gear), your debt. It’s time to address it. But how? Well, allow me to share with you the best kept secret in personal finance.
The only sure fire way to get rid of all of your debt… Are you ready for this? Is…to…
PAY IT OFF.
Were you expecting something a bit less painful? Not in this reality.
The only way to address your debt is to PAY. IT. OFF. I know, it’s an unfun concept. But it’s time to face the hummus and start paying back that which you owe.
Ok but how?... Let’s get into it.
To start, list out all the debt you have. Groan, I know. This first step is a must. It doesn’t matter if you use a notepad or spreadsheet, you need to account for, understand, and see your total debt.
Second, you want to figure out the interest rate on each item. What’s the interest on your car loan, mortgage, credit cards (for credit cards it's the Annual Percentage Rate or APR)? Once you find that out, list each item, its interest rate, and the amount you owe. This may be an overwhelming exercise, but it’s necessary. Listing everything you owe will help you develop financial awareness and will form the foundation of your debt attack plan.
From this point, you start chipping away at your debt, immediately. I cannot stress this enough, do not wait to start paying off your debt. There are lots of strategies online for addressing which debt line item first, for example, snowball (shockingly, I do not mean cocaine) vs avalanche. Search them out, learn what they are, choose one and start paying down your debt.
For those who have stretched themselves a bit thin, you may ask… But Jill, how can I start paying back my debt when I have no money left over at the end of the month? This is where the rubber hits the road. To this question I would say - stop spending more than you earn.
How do you do this? You start making some needed decisions. Let’s say, for example, in and amongst your monthly expenses you have a $650 car lease. Take a good hard look at that line item. Do you need a car that costs you $650 per month? Could you get something less expensive and relocate those funds to paying off debt? Allow me to answer that question for you, the answer is yes.
There are lots of ways to cut your monthly expenses, some are more difficult to wrap your head around than others, but there are plenty of solutions. The most important thing to remember here is that when you have debt, it’s your jailor. It limits you and your freedom, sometimes to a great extent. Sure some debt can be ok, like a mortgage, but only if you can afford it. Don’t develop Stockholm syndrome towards your debt. It isn’t your friend. Sure, you can coexist with it, but you want it gone.
The fact of the matter is addressing debt is really about getting clear on what you can and can’t afford. Once you acknowledge the truth of what you can afford and begin to live below your means, you’ll be surprised by how quickly you can attack and destroy your debt.
You might assume that life becomes less thrilling with less money to spend, but from my experience, it actually becomes richer because you start to assess what’s really important to you. You start to spend your time and available resources on what you love.
Be Kind To Yourself
Debt is a doozy no matter how you slice it. Yes, it can bring up big emotions, but you owe it to yourself to tackle those feelings and start paying it down. Though it may be uncomfortable, it’s part of being an adult (sigh…don’t you wish they told us that in high school?). You deserve a life free from debt and the stress that comes with it.
As you start to plug away at your debt, remember to be kind to yourself through the process. If you begin to take steps toward a debt-free life remember that you are doing the work. You are making that life happen. Sure it may be uncomfortable at first, but I promise, it will get better and easier. It’s a life worth pursuing.
As a reminder, you’ve totally got this!
Over the past many weeks of creating content and templates, I realize that to help sustain this passion project I would be grateful for your support!
For those with a dollar to spare, I’ve set up a Buy Me A Coffee account for folks to contribute to here and there. For those frugally focused, I would be incredibly grateful if you were to share my work with your networks and folks you think would enjoy my journey (via email, social media, or homing pigeon).
A special thank you to those who contributed to my Buy Me A Coffee or shared a post! Your support means the world to me - truly.
Whether you're able to contribute or not, I’m so glad you’ve joined me on this journey!
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