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The statistics on consumer debt allow the assumption that in one way or the other, everyone is confronted with debt at some point in life. 

While getting into debt is only one limit increase away, getting out of it is a pain in the a** If you have been there, you sure know what I am talking about. 

Paying off debt is not difficult, but it’s hard.

There is no good debt – but debt can be good for you 

Statistically, being in debt doesn’t make you special. However, slaying your way out of debt changes you forever.

The habits and skills you acquire during that this time of hardship saves your future You from even more expensive mistakes.

Learning how to budget, where your weaknesses are, saying ‘no’ and delayed gratification is an investment in yourself that pays off for the rest of your life.  Think of all the money you might have carelessly thrown around in the next 30 years!

If you can’t change it, learn from it.

See it like this: You can get back money, you cannot get back time.

Time is the only finite resource in this world. Which is why you should get out of debt as quickly as you possibly can. The grass is definitely greener when the lawn is yours. 

Paying off an amount some people earn in a year is a truly liberating experience. The amount of wisdom and confidence you gain from achieving such a milestone… You can stop looking for heroes. 

When you have paid off 100k, you have proven to yourself that you can MAKE a 100k. Debt is a stupid tax investment you pay which you actually might benefit from an entire lifetime. 

The way I see it is that the experience of crawling slowly but surely out of debt is something that makes you get ahead in the long run, kinda like the Aesop’s good old tortoise and hare tale: Slow and steady wins the race.

I have broken it down to key lessons and takeaways that have helped me become better with money. Debt taught me essential life skills and changed my life for the better.

#1 Budget! 

I don’t see budgeting as a necessary evil. In fact, it is an act of caring for my money and being intentional with it, so it can serve me best.

Budgeting makes your spending less random. My budget gives me freedom. As I told in a previous post, budgeting with YNAB totally accelerated my debt payoff journey.

Having a written budget is not simply tracking where your money goes, but telling your money exactly where to go. Budgeting helped me organize my priorities and achieve my goals faster. 

#2 Earn more money

If I hadn’t so many loans to pay off and got frustrated about the slow progress, I probably would have never left the comfort of my job and applied for a better paying one. The substantial pay rise (among other factors) was a major incentive to quit.

Which brings me to the next point: 

#3 Become an awesome negotiator 

First time ever, I was forced to negotiate like a boss. 

If I wanted to make serious progress, I needed to make that money. Running the numbers, it quickly become clear that anything less was non-negotiable to achieve my goals. 

I wanted to earn significantly more to keep that snowball rolling.

So on top of that, I became ruthless with all my expenses. Every month, I would look at one bill and squeeze everything out of it. I invested the time to find the best deals, renegotiate my current plans, cancel subscriptions etc. I questioned EVERYTHING. 

Don’t underestimate the compound effect of little efforts every day. Small chunks here and there add up over a year. I overcame my pride to negotiate pricing of any kind and reaped the results.

If you can’t increase your income, find ways to reduce your expenses. Negotiating a price rate is like a pay rise. If you can do both, you maximize your results.

Determination is the mother of good negotiators. Never be afraid to ask.  

#4 Resourcefulness

Finding ways to earn more money can make you crunch your brain and get maximally imaginative.

I would have probably forever procrastinated putting all my dusting junk on Ebay if I weren’t so determined to get some extra cash to throw at my balance.

I have become so much more aware of opportunities to make some extra money. Once I changed my awareness, I started seeing money and business opportunities everywhere. Now I love ‘finding’ money!

#5 Minimalism 

Be happy with less and love what you have  

I would have never called myself a minimalist.

However, selling all the stuff I didn’t use/like/need/want taught me the value of things I own as well as how quickly ‘things’ depreciate in value. Spending quality time at home with friends –as cheesy as it sounds- was next to free and is a valuable lesson that experiences are the ‘things’ that really count. Once I freed myself from all the junk, I suddenly had so much more time for other things.

Making conscious decisions about what and how I buy (and having very limited storage space) made me waaay more purposeful with my space. The items I do have, I appreciate so much more. I enjoy material things but I have definitely become more selective. I skip buying useless knickknacks of any kind. Please don’t buy me mugs for my birthday.

Today, I invest in experiences and quality pieces I know will serve me longer. 

Thanks to that (and my budget) I make less impulse purchases and don’t follow futile trends.

It is hard to sell a high-fashion, one-season item a few months later. Trends pass, the junk remains. I have become a much more thoughtful in my purchasing decisions, particularly of consumer goods like beauty and fashion items or electronics. More than ever, I appreciate quality and craftsmanship.

#6 Setting & achieving goals

You learn to question your money-related behavior when you realize your current plan (or lack of it) isn’t getting you anywhere. 

Setting ambitious goals and pursuing them is not something that we are born with. It can only be learned. It takes determination and persistence.

It is great when you have someone cheer you on while you are slaying your loans. But you are the one making the payments, accepting a never-ending array of restrictions and limitations.

But you realize that small, consistent actions adds up to big results over time. That is called discipline, my friend.

No one knows how to stay motivated more than you. No bank is going to call you and congratulate you.

 Paying off debt is a quiet victory.

Learning to cheer yourself on, manage stress, face adversity, rewarding yourself and celebrating small wins are key personality skills that you will benefit from your entire life. 

Nothing teaches you how to set and achieve goals unless you do it. 

#7 Making decisions

Making conscious choices about how I spend keeps my money constantly aligned with my goals. 

Learning to make decisions, realizing what matters most to you and understanding the value of things -financially and personally- is something you cannot learn early enough. 

Reflecting choices beforehand and making mindful decisions raises your awareness on what you truly value and what your deal breakers are. Buying things you love instead of randomly grabbing things that are available or on sale will save you tens if not hundreds of thousands of dollars in the span of a lifetime. Impulse is expensive. 

Knowing exactly what you are looking for also makes it less likely to be talked into purchasing something you actually don’t like that much. 

I have become non-compromising. If I don’t love an item, it doesn’t fit, is uncomfortable or the quality turns out to be crappy – I will return it, period. I don’t compromise on quality anymore. I used to keep these items, trying to justify keeping it to find it a year later with the tag on still, gathering dust in the closet. It has saved me from so many bad buys – and tons of money along the way. 

Knowing what you want sharpens your decision making skills.

We all make a ton of decisions every day. With a clear end goal in mind it is definitely easier to make the right ones. It means knowing that your daily little decisions all have consequences and how they compound in the future.

On that note: I am definitely no frugality expert. I personally don’t find any pleasure in maximal frugality to the point where it impacts my life and mindset in a negative way. What I surround myself with influences my energy and mood like nothing else. I would never move out of the apartment I love and move into a basement to save a few bucks but be miserable. 

#8 Saying No

It is tough for many, but when you know your payment is due in two days, you think hard on how desperately you really need that pair of shoes or a night out in town with dinner and drinks. 

Saying No doesn’t make you asocial. Life is about choices. And your choices = priorities = actions define your results. Your time and money are valuable resources and it is okay to treat them accordingly. It takes courage and practice to be selective with your commitments.

Saying NO to one thing is saying YES to another. 

#9 Knowing your priorities

Learning to make effective decisions about money means knowing the difference between wants and needs. 

You need money to be able to afford certain choices (=wants). Not having choices because you don’t have money makes you realize how having money gives you more choices. Debt is a result of a sum of choices as well. Paying off debt teaches you to make different choices now, so you have more options in the future. 

To do that, you need to be aware of your priorities and act accordingly. Nothing made me realize that I don’t want to be in debt ever again like being in debt. Getting rid of any financial burdens and reclaiming my paycheck has become a top priority for me. As a result, I have more freedom and abundance in my life which makes me happier, more generous with my time and money, which in turn makes me a nicer person to be around.

#10 Staying organized

While I would generally call myself a fairly well-organized person, getting my finances in order has accelerated my organizational skills big time. And my results.

I have learned to manage myself well enough to pay all bills on time, plan ahead for larger expenses and avoid any late-payment fees. You cannot afford to not be super-organized when it comes to money management and committing to a plan.

Creating a filing system, effective time management and setting up auto-payments helps reduce the stress around money big time. Being in debt is stressful enough. Getting your life organized takes so much of that stress away.  

Staying on top of things really is half the success.

#11 Overcoming negativity

Part of the money mindset work was dealing with the guilt and shame around it.

Much of the negativity might come from the people around you, questioning your actions, goals or sanity. A lot comes from the negativity that is self-made, in your head.

The biggest takeaway from this journey was changing my entire mindset and attitude around money, learn to celebrate small wins, overcoming adversity and the importance of clearly defined goals and knowing you can achieve anything with the right mindset, focus and determination.

So, was it worth it?

Life might come with many regrets. At this point, I think that regret or shame, although painful, are useless (indulgent) feelings. You cannot change what’s in the past. I reframed it to gratitude that I have learned my lesson in an early stage of life. I had enough time to turn my life around. The steps in this post along with a lot of mindset work helped me completely transform my relationship with money – for the better.

Looking back, I have learnt so much about finance and myself that I don’t regret going through any of it. Committing myself to paying off my debt meant making tough decisions and getting into a solid habit to managing my money effectively. This experience has taught me more about finance than any degree ever could.  

Being in debt is a high price to pay, but the life lessons you learn along the way are priceless. 

What is your story? Are there key takeaways you had from paying off your debt?