Overcoming Debt: A Good-News Story
Sometimes when we’re so far into the debt hole, it can feel as though we’re climbing a never-ending ladder out of it. We can feel as though we will never be rid of it, and our lives will be stuck in limbo forever.
Occasionally, I read a good-news story about someone who has managed to turn their life around.
Reading these stories is really inspirational and I would recommend doing so for anyone who needs reminding that debt doesn’t have to be forever.
This story is Leo Babauta’s. After making some bad financial choices, getting a car loan, a credit card with a higher limit, charging things to credit that he couldn’t afford and spending without a budget, Leo found himself in the debt hole.
Every person’s financial situation is different, but Leo shares some valuable lessons that helped him to recover from his debt. Here are a few.
If you’re trying to get out of a hole, stop digging. Cancelling the credit cards was Leo’s first step to getting out of debt.
His second step was to eliminate non-essential expenses.
He learned to live frugally, eliminating his cable TV, eating out, trips to the cinema, alcohol, cigarettes and buying new clothes.
He implemented a “spending plan” as opposed to a budget, realizing that “budget” can be a scary word for some.
He tracked every transaction electronically, so he knew exactly where all of his money was being spent.
He created an emergency fund, a debt repayment plan, and a side-hustle.
Along with other progressions, he eventually found himself at the top of the ladder and out of the debt hole.
Leo is proof that debt does not have to be forever.
If you’re in need of inspiration, learn a thing or two from Leo’s story here.