Money: Debt

Because of the state of the economy and the fact that several people in my resolutions blog mentioned wanting to get out debt - I decided to write a little bit about Money... starting with debt.

1.  Drop the emotion.  Don't feel like you're a bad person or done something totally wrong to be in debt.  Most people - certainly people who went to college - are in debt at some point.  Some very seemingly rich people are actually living in debt - this is partially what caused our current credit crisis... but first thing - drop the any negative emotional ties to the idea of it because they won't help you get out.

2.  Make it a project.   If you want anything at all - to lose weight, to get a job, to get rich, to get out of debt - you must make it a project with a plan.  You need to embrace this.  If you don't - you'll never achieve it.  Plans make things simple.  For debt, I recommend making a spreadsheet or even a list on lined paper.  You need to start tracking all the debt you owe and track your income.  The goal of this game is to make the debt shrink.  You should check it weekly.  You can project how far away you are from being debt free by dividing the total debt by the amount it decreased the week before (or an average weekly drop).  If you're not happy with the speed, you''ll know you need to decrease spending.   But treat it like a project.

3.  Get rid of loans/credit.  Whatever you can realistically pay off - you should pay off.  Credit cards are a big one.  Anything that is subtracting expenses is the demon for your current game an 19% on a credit card bill is going to kill you.  You need to get rid of that anti-income - it's like stopping the bleeding before the wound can heal.

4.  Slow and Steady.  Don't look for the  big quick win.  In anything from stock trading to gambling to company money management - it always seems that if you go for the big win with money - you're never going to get there except by sheer luck - and if you're in debt right now - let's just postulate that your luck needs a breather and you can be practical for a bit.   Slow and steady works.  Consistency.  Every week you get a little bit more out of debt - as much as you can... but do not hope for the big job that will pay off all your bills.  Don't focus on the size of the numbers that you're behind - focus on changing the cashflow... that's what matters - shift the flwo from outgoing to incoming.

5.  The great thing about being poor:

It may not seem like this now.... but there is actually a little odd advantage to being where you are at right now.  For example:  when you are building a house out of cards.... the first few cards are pretty easy to set up - they don't work out, you set them up again - the stakes are low.  As you get to the 2nd and third story of the cards, you start to take on pressure and it becomes more and more stressful to stack the cards, you can't move as nimble as you could when you were first setting up.  However - the key is to make sure those intial cards are strong and get reinforced when you first build them.  I think building your career is just like this... when you start out - there is really nothing to lose.  You can take whatever job you feel comfortable taking, you can try defining yourself however you want and essentially - if something isn't going to work, you can hit the reset button because no one knows (or cares really)... the key is to just DO things...   I know a lot of successful people whose big break couldn't come until they'd lost their position before.  I knew an actor who wanted to write and direct and had a little clout, but until he lost everything and was driving a limo for cash - that's when his ego got out of his way and he actually started over from a humble position and just made sure he put himself around "the right people."   Yes, he was professional, yes, he understood the industry and he had some talent.  But a lot of people fit that description, but their egos block them... I think having that awareness plus lack of ego getting in your way (i.e. I'm too good for that job)... I think it can bring good things. 

I was never one of those artists who condemned earning money as something for terrible people - because I didn't grow up with money.  In fact, as a kid, getting hand outs and standing in welfare lines was part of growing up.  What I did have was an amazing mother who was my role model - someone who loved both her children more than anything on the planet and was smart and put herself through school and worked while raising us.   I was also fortunate that despite our financial situation, I did grow up in an area filled with intelligent and proactive people to learn from.  So - I know what the process of going from nothing to something is and so I offer these thoughts in case you don't have a model of your own to use or you might just need a starting block for your own plan. 

I hope it's helpful.