Small tips to eliminate Debt & Financial Distress
In a previous post, I stated that philanthropic efforts are what makes this world go ‘round – this true. However, for some of us, good financial health is what keeps things spinning and functional in our own little realms. Bad debt is our arch nemesis. Per the findings of a 2015 survey conducted by the American Psychological Association, 64% of Americans reported financial problems as a “somewhat” to “significant” sources of stress.
In the same year, USB Investor Watch stated that half of those who are millionaires with less than $5 million believe that one wrong move, such as a job loss or market crash, would have a major impact on their lifestyle. Not even the wealthy class is immune to headaches that stem from finances. Throughout life, monetary challenges will come, go and in some cases, “stay” and forcibly become a part of our lives like unwanted fungus. To overcome and kill all financial fungal debt germs for GOOD, the following weapons are essential for this kind of warfare: knowledge, discipline and the power of patience.
Understanding your spending habits
Last year I began making payments on my dreaded student loan debt. Although I consolidated my loans, this monthly payment was a noticeable addendum to my budget. I liken it to a husband or wife who is forced to make room for an unwanted in-law seeking to move in for the long term. Ultimately, I too was forced to make room to for what seemed like an unwanted house guest: my student loan debt.
I decided to create a spreadsheet and list each expense as a line item. I also took the conservative accounting approach and maxed out each expenditure. For ex: on average, my light bill, on average, falls in the $60-$70 range. Its peak has never exceeded $100, so consequently, I entered LIGHTS $110 on my spreadsheet.
The Epiphany: when debt is inconspicuous
As I examined my financial statements, I noticed over the course of several months, I spent an obvious amount of my disposable income on snacks. To my chagrin, I hadn’t been intimately in tune with my spending habits. All bills were paid in full and on time and I never had to borrow money from anyone. I had a fixed amount of cash deposited to a savings account each month and all was well in JJ Brown Land. But as I always like to say, “There’s always room for improvement.” I could have been saving more money had I not taken my eye off the ball. However, in one month alone, I had spent close to $200 dollars on SNACKS!
In order to make some room to pay Nelnet and increase my disposable income, I immediately addressed my issue of snack food binge eating. Had I not done the spreadsheet exercise, I likely would have wasted more of my earnings on junk food and other things. A lot of times those purchases less than or equal to $5 are the primary perpetrators that wreak havoc in our financial worlds. It’s so easy to habitually spend on low-cost items, hence unknowingly building a mountain of careless excess transactions over time.
Discipline is the servant to inspiration
Bebe Moore Campbell was a New York Time’s bestselling author. After having taught in the Pittsburg Public School system for a number of years, she decided to pursue her dream in becoming a full-time author. For 5 years straight, her work was rejected by various magazines and publishing companies. Denial did not stop Mrs. Campbell, as she persevered and eventually went on to author 9 books and a number of essays and articles before her untimely death. Her favorite quote as an author was “discipline is the servant to inspiration”. Bebe Moore Campbell was disciplined because she wanted to succeed.
After one has identified the source(s) of their financial problems, it’s time to become disciplined. How much does your financial health mean to you and to what extent are you willing to go to succeed and improve your finances? Recall that money is a source of stress for many Americans. Life is extremely short and fully loaded with an assortment of contentious battles to grapple with. Why add financial woes to the list? After all, if something is broken, fix it ASAP.
Sacrifice and tough it out
If repairing your financial life entails not taking a vacation, shopping or going to the movies, then so be it. If multiple outstanding balances are holding you down, use your tax return and/or cut expenses such as Cable Television to destroy the debt that has you shackled and depressed. I can’t speak for everyone, but the fewer people that I owe, the better. Become disciplined to sacrifice and suffer a little for the short term so that you’ll feel much better in the LONG RUN.
Once you’ve solved your financial problems and slain the debt dragon, you’ll alleviate so much weight off of your shoulders. Your load will lighten and you will, with speed and agility, find it easier to navigate through life’s mazes. Heck, you might even grow wings and fly without having to guzzle a Red Bull!
Think like an investor
Sometime in the 1950’s, the late Dr. Jerry Buss and his wife were walking through the park. On the ground before them was a 5 dollar bill. Instead of spending the newfound cash on whatever came to mind, the couple returned to their home with the crumpled currency in hand, sat down and analyzed a number of different ways on how they could spend it. Dr. Buss & his wife understood the value of a dollar.
Sometime in the 1960’s, Dr. Buss partnered with other investors and financed $6,000 of his own money into a real estate venture (Est Present Value $50,000). There were so many things that Dr. Buss could have done with $6,000 at that time, but he chose to think like an investor. Dr. Buss achieved massive success as an investor and became a multi millionaire (later on a billionaire). Dr. Buss would go on to purchase the now defunct Los Angeles Strings, The Lakers, and the Kings. Dr. Buss was very knowledgeable, disciplined and PATIENT. For some, it may take a while to get their finances back on track, but remember it is better to struggle during temporarily versus suffering in the long run.
For some, it may take a while to get their finances back on track. But remember it is better to struggle temporarily versus suffering in the long run. Have PATIENCE and adopt an investor’s mindset. Envision all that you can do in the future as opposed to the limited array of activities you have available to you in the present. Unless you’re a skilled day trader, most investors think “long term” not short term. They invest for tomorrow and not for “today”. Finance expert Dr. Boyce Watkins has repeatedly gone on record to support this belief. Unlike the masses of society, long-term term investors DO NOT seek immediate gratification. As the old adage says, “Good things come to those who wait.”
The power of patience
I do realize that some people are so far fucked in the financial sector of their lives. They’ve already succumbed to defeat – but there is HOPE. Unlike the gift of life, it is possible to come back from the dead after having committed financial suicide. With knowledge, discipline, patience and if need be the help of a financial expert, you can win. With this kind of weaponry, it is probable to resurrect your financial life. Seek to do whatever is necessary to not only exterminate the ailment of financial affliction but brighten your financial future. Go above and beyond to construct a soft comfy cushion in the form of savings & investments.
Again, if eliminating your financial debt requires enduring a short term period of “displeasure”, then suck it up and ride the bench! Once you have achieved the feat of slaying the debt dragon, you may not become a multi-billionaire as Dr. Buss. You may not own a fleet of exotic cars or live a life of opulence. But whenever we’re able to solve our financial problems, that is something to celebrate. If you can increase cash flows, you’re in contention to sail and not sink. And lastly, once you’ve regained control your finances with precision and excellence…that in itself is a HUGE financial gain!
Keep on shining, everybody,