Note: This is a guest post from Lama Farran, a Certified Money Coach.
Having guided numerous families and individuals on their quest to pay off debt, I wondered about the characteristics which make them succeed on this path. Why are they able to successfully follow-through with their commitment to get out of debt when others fail at it?
After some reflection, I was able to pinpoint the 8 following behaviors which make them more prone to pay off their debts:
(For simplicity, I will refer to them as The Debt Slayers in this article).
1. They are goal-oriented and have a clear focus.
One of the first exercises Debt Slayers do before starting to pay off their debts is they define their SMART goals: Specific, Measurable, Attainable, Relevant, and Time-bound.
Without them, people are left shooting in the dark. Would you get in your car and expect your GPS to get you to a specific destination without entering an address? Probably not. The same applies to money.
Debt Slayers are goal-oriented. They are clear about the path that lies ahead. They know how they are progressing and how much they have left before they get there.
2. They take steps to change auto-pilot spending habits.
Human beings are creatures of habit. We get comfortable in our ways and routines. As a result, it requires specific self-awareness to get off the auto-pilot mode.
When it comes to spending, we tend to: pick up the same coffee every morning; keep the same gym membership; automatically renew our home and car insurance; pick up the same take-out for dinner in the evening; buy gifts for everyone we know during the holidays because “that’s just the way it is.”
Debt Slayers are not afraid to stop and ask themselves the real reasons behind their spending: Is it out of habit? Laziness? Boredom? Stress? Social pressure? Or something else?
They’re comfortable getting off the auto-pilot spending mode. They are conscious about where and WHY they’re spending their money.
3. They work hard to identify the difference between needs and wants.
Debt Slayers don’t easily fall for advertisements purposely designed to make someone feel like they need the advertised product. For example, they know that clothing and shelter are definite needs. However, buying the latest trends of shoes and clothes, or having a bigger house than required are simple wants.
Debt Slayers are able to dig deep and honestly ask themselves if their purchase is a must-have or a nice-to-have.
4. They don’t “Keep up with the Joneses.”
The Joneses are not only your next-door neighbors and your close friends, but also your 500 friends on Facebook and Instagram.
Debt Slayers are aware that everybody else’s life looks plentiful on social media or when observed from the outside. However, they do not let the vacation pictures of friends or strangers derail their desire to become debt-free.
Some choose to simply limit their exposure to social media, knowing very well its negative effect on spending. Others stay on social media but with the added awareness not to allow it to affect their debt-free goal.
5. They communicate openly, honestly, and regularly about finances with their partner.
It is difficult to pay off your debts as a family if you are not on the same financial page as your partner. Once money becomes a topic that does not trigger fights and arguments, things will go more smoothly.
Debt Slayers perceive debt repayment as a common project to tackle together. Efforts are coordinated to move forward, just like a team paddling a canoe in-sync to move it fast and straight.
They also have regular, honest, and judgment-free money conversations. Finger-pointing is replaced with productive problem solving, especially when they hit bumps on the “debt-free road.”
6. They are patient and disciplined.
Debt Slayers know there is no magic wand that makes debt disappear. It takes a considerable amount of patience and consistent actions on a daily basis.
They do not get discouraged at the amount of time it’s taking them to become debt-free. They remind themselves how far they’ve already come. They focus on their daily efforts, knowing that, in the end, they will add up to a significant feat.
The process is indeed very similar to losing weight. No magic pill has yet been invented to shed weight overnight. The magic ingredients lie within: patience, discipline, and commitment.
7. They find ways to have fun while paying off their debts.
Who wants to live a life based on a restrictive way of being? Not Debt Slayers!
They know that debt repayment is their priority and they derive great joy from seeing it getting reduced. Nevertheless, they still find ways to have fun and celebrate milestones.
People have different notions of what fun is: to some, it may be a fancy candle-lit home-made dinner; to others, it could be attending a concert or going on a weekend getaway. So it’s essential to have something fun to look forward to.
Just like an extremely restrictive diet is bound to fail after some time, paying off debts without ever allowing yourself to have fun will also be doomed.
8. They are not afraid to ask for help.
Some perceive asking for help as a sign of weakness. But Debt Slayers know that properly managing money does not come naturally to everyone. So they guiltlessly ask for help because they see it as a sign of determination to make things better.
Help can come in many forms: it can be joining a Debtors Anonymous group, a Facebook support group or working one-on-one with a money coach. Help normally comes with accountability and support, which can increase the chances of success.
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Lama Farran is a Certified Money Coach and an aspiring minimalist, living a debt-free life. Her mission is to help individuals and families achieve financial peace of mind by focusing on the behavioral and emotional sides of money. She also provides practical financial guidance to help her clients become empowered and lead more fulfilling lives. You can claim your free copy of her money guide at Max Worth.
These personal experiences are so valuable because it’s easy to believe you are an exception. But I have to add if you and your party don’t share the same goals it’s a rough ride. Budgeting can be seen as a waste of time. I would counter that mind set with if you have faced either bankruptcy and or foreclosure, consider how budgeting and paying attention long before getting to that point would have saved the years of bad credit and hands tied to do much of anything!
This is a timely post. It helps tremendously us to set new goals reaching FI . Thanks!
This article change my thoughts about money. Was looking for the link to the documentary, can I watch it online?
Technically speaking, money is created by debt. The day everyone manages to clear their own debt, in theory, there should be no money left in the world… Debt is a necessity of our system, the problem is a lack of balance : some have too much debt, others have too much money. Maybe it is time to share wealth and debt in a better way?
This is a terrific point. Most of these articles are written for folks who lack financial discipline. My husband and I are extremely financially disciplined, and are well on the way to being financially independent in our 40’s. It’s required saying “no” to many things – but worthwhile nonetheless! We are at a point, however, where we are looking into some secured lines of credit to help us make more money via investing. I sometimes get frustrated with the “zero debt” concept, because you’d see very few new business starts, or growth of much kind with that mentality.
Investments are also risky, as the writer below comments, beware of lines of credit you can easily lose 100K in a bad “investment”. I wonder how you are doing now in 2020? – interesting. Me? I still have that money I invested on sure thing shares to pay back, we are doing it slowly and surely.
You can’t create wealth if you owe everyone else that’s obsurd. It is possible to live without debt and if you don’t think so you’ll be stuck forever. Taking out lines of credit to invest is insane. Business owners know that’s their biggest risk. If you like to gamble then play that game. Cash is king.
Why would there be No money if there is No debt??? Does not make much sense. People want things they can not afford, so they chose to take up loans from others with more money. Like the Banks. Money does not disapear with no debt. Debt has never been a good thing.
Nice write up. I agree with all of the items. I did however, after getting started clearing my debt, put #7 on hold. (They find ways to have fun while paying off their debts.) I had to clear $ 160,000.00 in unsecured debt (business failure, relationship failure, etc.) at 42 and I realized that it was GO TIME. Cleared $ 65,000.00 in 4 years and the remaining $ 96,000.00 in 44 months. No time for fun during this time, my goal was debt free before I turned 50. Made it by 7 months. (July 23, 2011.)
Now at 55 I am a full time RV’er and I spend 6 months working and 6 months volunteering at animal shelters. Being debt free gives you options.
Wow, Mike, way to go! Your story is so inspiring! Thanks for sharing. Any more tips on how you did it, in addition to working 4 jobs, would be welcome. I’m sure you have a lot of wisdom to share….
This is so encouraging and inspiring!
I worked retail for many years — the mindless spending — the stories I could tell are dumbfounding. That perhaps was my saving grace. At the end of the day, I never wanted to be that person. (the customer). I would rather make the money than spend it.
I love this post. It has been
my experience that debt,
clutter and unhealthy weight
all have one common denominator, your mindset.
Once you develope a
positive, proactive mindset,
you can conquer your debt,
your home, and the scale. All
of which leads to a more
peaceful and happy life.
What steps are recommended for very low income families to get out of debt or families who have had a huge financial set-back like medical costs or lengthy unemployment? I understand the concept but don’t see how this can help unless you already have significant income to start with and are simply making impulsive spending decisions. One of the suggestions is debt consolidation. It’s a great idea. But which financial organization will assist in consolidating debt for low income.
You are correct! There are situations beyond our control, however, I would try to work with a financial person I trusted.
It can be done.
I was making <$40K with $10k of child support a year (in Oregon that is about $25k after taxes). and I was able to clear the first $65k of my debt in 4 years. I sometimes worked 4 jobs, 3 at the same time upwards of 18 hours in a day. I WANTED OUT OF DEBT.
I was finally able to get a job that paid closer to $70k for the last $96k that I paid off in 44 months. Debt free at 49, June 23, 2011.
Hi, I don’t have any tips, but maybe Courtney does – you can her posts on the topic here:
https://bemorewithless.com/category/money/
So far, I’ve managed to live my life without debt. It’s something I’ve learned from my parents, not getting into debt in the first place. I rather not spend and live with less than live over my means.
My partner is luckily quite strict with money. Maybe a bit too strict, sometimes. So we don’t have problems there either.
We buy fun stuff too, don’t get me wrong. My partner is a huge movie and television buff and I have my own little vices. But even with them we never go too nuts and make sure we can still pay our rent. A good way to avoid debt, by the way, is not buying a house or car or big money pits like that. :)
I really admire people like you who figured out that debt free was the way to go early in life. Good job. It only took me 49 years to figure it out.
Some exceptional advice here for people looking to make a change with their finances. I know for my wife and I these things thankfully seem to come relatively easy. My biggest personal struggle has been with #7; I find myself wanting to go grab a soda or eat out more often than our budgeting allows and reminding myself of the bigger picture sometimes isn’t enough. Thankfully my wife is good at helping remind me of these things better than I am of thinking of them on my own(#8)!
Best of luck to everyone out there with this one, it’s a hard struggle!
When I think of eating out I picture myself sitting at the table and eating THAT food. Eating out is a social thing. Most of the time I decide to eat the food I have and I enjoy at home.
Communication between spouses is a big one. I know couples where one is thrifty and the other enjoys retail therapy. Fortunately my wife and I are on the same page. Our only weakness is books!
Thank you for a wonderful article! It’s refreshing to read an article that supports our choices. In a society where living on credit is so common we sometimes feel like odd ducks. My husband and I are debt slayers we are focused on our goals, we discuss our progress and choices regularly. We value experiences over possessions and don’t feel like we miss out at all. Well I suppose we miss out on all the stress that many of our friends experience from living beyond there means. That’s one experience I’m happy to do without ????
Surly: Even some retirees are “odd ducks” like us, but many still stay in debt and overspend on g’kids, etc. charging stuff. We live low key, have traveled much over the years, now we enjoy local parks and outdoor activities. We eat at mom and pop places avoiding the big chains and watching the grocery sales. We both worked, didn’t raise a family and put away money for early retirement. People way past retirement age are still working as they are in debt. How much stuff do people need anyway? Do kids and g’kids need tons of useless stuff? My g’parents never loaded us kids down with stuff, just sent us money for b’days.
This is a great post, thank you for sharing this. We are paying two university educations right now while saving and investing in our retirement. We have struggled at times with continuing to have fun while doing so. Hit home!
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I see myself in some of these traits, but I still need to work on others. Gives me some things to think about…thank you!
Great post. Simple. Especially your last point.
I see this all the time in the classroom and on campus ~ people are just way too hard on themselves. We’re human. Mistakes are made. The big secret is — just. keep. going. Keeping a list like this ‘top-of-mind’ is very helpful for those times when you get off track.
Thanks again for sharing.
Although we are in an industry traditionally associated with the idea of affluence, I’d like to say that a large part of our firm’s success has been working with wonderful clients who are realistic and directed with spending habits. We pride ourselves in promoting the philosophy that good design fits every budget. We have followed Josuha for years and believe the principals he teaches can apply to the homes we live in.-Laurel Bledsoe
Pinky Swear is awesome! I love it! :)
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Auto pilot spending is a sore point for me. I have recently become aware of the concept and am guilty of it.
When I calculated the amount I spend automatially without thinking I was floored. I have been working to combat it. Thanks for pointing the concept out.
This is a nice, gentle blog ☺ very realistic