How To Eliminate Debt

You are in debt because you spend more than you earn. So logically to get out of debt you should spend less than you earn. It’s easier to say this than to actually do it, but it’s definitely possible to change your attitude towards money and get out of debt as a result.

You spend more than you earn because you currently have a debt mindset, or a scarcity mindset, in other words. So to get out of debt and start attracting abundance you firstly need to change inside. The first section of this post therefore deals with internal ways to eliminate the debt mindset and the second part is about how to eliminate debt externally once your mind no longer attracts it.

It may be tempting to straight away jump to the second section and read about how to immediately get rid of debt. But if you do this, even if you eliminate the debt, very soon you will be in debt again because you failed to change internally. So I urge you to read the first part and only then move on to the second section of the post.

How to get rid of debt mindset

First and foremost: never Ever borrow money again. Ever.

Don’t buy the stuff you don’t have the money for. Instead, try to come up with ways to earn money and buy things for cash. If you need money and you borrow it as a result, you select the easy route which doesn’t teach you anything.

Any lack of money that you experience gives you an opportunity to learn the lessons of abundance. Try to find ways of how to earn money and you will be surprised how creative you get to raise the required sum.

Everything that happens to you teaches you a lesson. But for some reason people don’t apply this fact to the money matters. Let’s say you want to learn to ride a bicycle. You try the first time and you fail. Do you then ask someone else to ride the bicycle for you because you can’t? Of course not! By asking someone else to ride your bicycle you don’t learn anything. What you do instead is keep trying until you finally succeed. The same goes with money – if you have a shortage of it, you should learn how to increase your income instead of borrowing money from someone else.

Borrowing money affirms that you have a lack of money. You feel helpless and weak when you borrow. You put money above yourself. Money should be your servant, not the master. If money is your master, you will always be at the mercy of it.

Don’t hide from your debt

You might say that looking at or thinking about your debt is negative – and it is. But this is much better than hiding from it and keeping the fear of the debt in your subconscious mind which manifests as further lack. So go with the less harmful negativity and face your debt. Know exactly how much you owe. In fact, go further and write a big number of how much you are in debt and put it somewhere you can see. I got this tip from John Reese and tested it with some of my clients and it worked wonders.

When you see how much you owe, it’s not as scary as not knowing how much in debt you are. Hiding indicates the fear of the thing you are hiding from. Your subconscious mind knows this and it emanates negative vibration of fear towards the debt and attracts more of it.

When you hide from your debt, the debt looks scary. When you expose it and put it on your wall or anywhere else you can clearly see, it becomes just a bunch of numbers. What’s even better, when you see how much exactly you owe, your subconscious mind starts to come up with plans of how to reduce the debt. This worked over and over again for my clients so trust me, this is a rule. Soon the debt will get smaller until you completely eliminate it.

Change your habits

(This is both internal and external tip. It’s internal because for you to change your habits you firstly have to change your mind. It’s also external because by changing your habits you are changing your reality externally.)

There are three types of people:

those who spend less than they earn

those who break even

those who spend more than they earn.

People who spend more than they earn think that all they need to eliminate debt is to earn more. This kind of thinking is what keeps them in debt. If the person is in debt, it’s not because of how much he earns. It’s because he has the habit of spending more than he earns. No matter how much such person would earn, he would always end up spending more than he has.

So how to change this harmful habit? I will tell you what worked for me and people I taught this to so it will probably work for you too.

I had an addiction to shopping (I told about that in a couple of my posts some time ago) so what I did to eliminate this negative habit is to stay at home for a couple of weeks without going shopping (except for food). When I would go shopping for food, I would only take enough cash to buy food for. I would never take my debit card (and definitely not my credit card) with me because I knew what would happen.

I felt such a relief after those couple of weeks because from then on I never had a compulsion to overspend. Now I take my credit and debit cards with me without the fear of being unable to control myself. Being in control of my finances is more important for me now than getting this “must have” top or bag.

I know that this advice may not apply to everyone. It will probably apply more to females than men, so I have another piece of advice that would be relevant mostly to men. The men that I know who are in debt (clients, friends and some relatives) find themselves in such situation because of (but not limited to) these reasons:

They fall for get-rich-quick schemes

They buy the newest gadgets (mobile phones, laptops, music devices)

They have numerous subscriptions (mobile phone subscriptions, gym memberships, expensive TV packages, etc.)

The thing is, you would not die if you would cancel any of these or stop buying things as such. Firstly, get rich quick schemes NEVER work. They make you POOR, not RICH. The mentality of people who create such schemes is to get the money and run. It’s not in their interests to make you rich, but it’s certainly in theirs to take your money. So please, never fall for these again. If someone promises easy money, run without looking back.

Now about the newest gadgets and equipment. I know it’s really cool to have many new things at home so that you would look good when your friends visit you. But such things don’t have any value because they make you poor. If you don’t have any passive income sources, create them and Then buy as many gadgets as you like.

Many people buy a car or a house from their savings and lose money this way because they invest in expenses rather than assets. The best book to read about this behaviour and why you will never be financially independent with such strategy is Rich Dad Poor Dad by R. Kiyosaki.

So instead of investing in expenses, invest in assets. When your assets generate additional money, you can buy whatever you wish. Assets include a house you bought for rent, anything else you bought for rent (car, washing machine, tools for some kind of work), currency, precious metals, websites – there are so many things to choose from. Basically you should buy things that you know about and which have the potential to generate more money than you bought them for.

Now about ordering subscriptions. It seems like having a subscription of $20 a month is nothing. But these sums add up and you are usually stuck with such subscriptions for a year or two (or more). So this all gets pretty complicated since it’s hard to remember what you are subscribed to and when the subscription runs out (some companies extend your subscription without telling you even when the contract runs out – like mobile phone companies in UK – not sure about other countries). You also get sucked into better deals once a subscription is about to run out.

So if you are in such situation, my advice is to never get into any kind of subscription if possible until you are no longer in debt. Unless it helps you make money of course. But then again, don’t fall for the get rich quick schemes:)

People also get in debt because of this common reason. They spend here and there and it looks insignificant, but when the small amounts add up, the sum becomes quite large. That happened to me and it’s really annoying when that happens over and over again. You promise to yourself that you will never find yourself in debt because of impulse buying but you keep breaking such promise because it’s so easy to spend small amounts of money.

This will be different for everyone, but here’s how my small expenses used to add up:

I would go out a couple of times a week with my friends and would spend money in cafes and on cinema tickets. Couple of times a week is nothing, right?

Then I would buy make up and other stuff for myself – just once or twice a week.

Then I would buy some good quality chocolate that I have a near addiction for – only once a week.

Then I would buy some clothes – a couple of times a month.

Then… And the list continues.

So it looks when you buy something like that as quite insignificant. But when it all adds up, the sum becomes staggering. So to change that, my advice is the same as the one I gave at the beginning of this section – don’t take your credit/debit cards with you, only buy the stuff you really need and take a fixed amount of money for planned purchases.

How To Eliminate Debt Externally

Reduce your expenses

Reducing your current expenses is by far the easiest way to eliminate your debt. I’ve noticed that people who are deep in debt have all kinds of unnecessary subscriptions and buy stuff they use only once or twice. If you are in debt, don’t buy expensive cars, top of the range TVs or other stuff that make you look good. You can also survive without gym memberships, subscriptions to magazines and any sort of club memberships.

Ruthlessly eliminate everything that you can live without and your debt will reduce significantly or will be completely eliminated.

Think of passive income streams

Once your expenses are minimal, you should start thinking of how to make money outside of your current job. The best income you can possibly create for yourself is passive income. Passive income is very different from normal employment because it doesn’t depend on your manual labor. The great thing about this sort of income is that it usually has the tendency to grow with time.

Tithe

It is the law of the universe that you have to give to receive. Tithing is powerful because by giving money away you as though show to your subconscious mind that you have so much money that you are even giving it away.

You should set aside around 10% of all your income for tithing. The more consistently you tithe, the more constant flow of money you will receive in return.

Pay yourself first

That may seem contradictory, but paying yourself first is what gets you out of debt. If you pay your bills first, you will never have anything left for yourself. It’s very hard to get this point to some people so really hear me. When bills come, people make it a priority to repay them. When they repay the bills and buy food and some other stuff, there’s no money left for anything else, such as savings. So they wait for another paycheck and the loop of struggle continues.

The best way to get out of debt is this one. Every time you get paid, set at least 10% for yourself (I set 20%), then donate at least 10% to increase your abundance and then use the rest of your money for bills and food and stuff you really need. The 10% that you save should be put somewhere you don’t have an immediate access to. High interest savings accounts which give you no interest for the months in which you withdraw money are the best, in my opinion. I have a normal savings account and I also have a cash ISA because it’s a tax-free savings account.

When you pay yourself first, you start to feel more balance and the feeling of financial security replaces the feeling of financial scarcity. This in itself makes you come up with ways to make more money and thus you have more and more money left to repay your debt.

Some of you may say that it’s impossible for you to pay less for bills, but it can be arranged no matter what companies you have a debt with. Also, when you know that you have not enough money to pay for bills, you get creative and come up with money anyway. I know this seems risky but that’s how it works – when you really need something, you attract it.

Summary

I know that it’s very depressing to have a large debt. But if you take the steps provided in this post your debt will indeed reduce and with time you will eliminate it completely. The most important thing you should do to change your financial situation is to start thinking about it differently because your mind is the cause of your financial position.

People who are in debt usually complain but do nothing about their situation. So be one of a few who actually take action to improve their financial status. When you manage to improve it only slightly, the knowledge of how to do that will stay with you forever. With time you will master the money subject completely which will give you the freedom that so many people seek but never find.

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• Become an Abundance Magnet
• Money Attraction Hypnosis
• Interview With an Inspiring Web Entrepreneur Yaro Starak
• 15 Reasons People Don’t Achieve Their Goals