Posted on 20 June, 2016

The 4 Ways I Got Myself Out of Debt

By Jacob Andreae in Financial, Personal Development The 4 Ways I Got Myself Out of Debt

[Image Source: Sean MacEntee]

If you’re in debt and wish you could get out, you must read this post. It details my experiences of delving deep into the pits of dishonour letters, summons’ and cancellation of services.

My transition from full-time employment to full-time self-employment was a poor process. I didn’t plan it at all. I resigned from my high school teaching job to chase entrepreneurship with a home loan, car loan and family of six.

We couldn’t afford to pay our bills and the debts quickly accumulated. My credit card charges rose sharply and so did the number of dishonour letters we received. I received a letter from two separate organisations stating my debt had been transferred to debt collectors, one of which sent a letter of summons to have it paid within a certain time frame.

The really sad thing was that when I rang up one of the organisations to sort out a payment plan, the lady on the other end of the line calmly said not to worry because there were many other people who were in the same position. That made me feel a little better but then I thought about it and I felt really sad for the financial state that so many people find themselves in.

Dragging myself and my family out of debt was a long, tough battle. It took a lot of patience, hard work, sacrifice and persistence. The biggest lesson I learned was that we all need hope. When I saw the poor state of affairs, I easily felt helpless. It was easy to drift into negativity and let myself be effected by the world. Once I created a plan, I could see light at the end of the tunnel. That light gave me hope. I realised that we all need hope in everything we do, especially when we’re coming from a place of darkness. In addition to hope, that plan gave me a sense of control.

The 4 Ways I Got Myself Out of Debt

  1. I made the big companies wait.
    This was a huge mindset shift. It took a lot of courage and didn’t feel great, especially in the beginning. However, when I look back, I feel a great sense of empowerment. Admittedly, I used the service and had to pay for it, but in those moments, for once I wasn’t going to make my family go without. I organised payment plans and prioritised my small amount of money for more immediate concerns. The big companies are going to get their money one way or another.
  2. I paid myself first.
    Making the big companies wait is not good if you don’t do something smart with your money. Hence, I made sure to pay myself first. We get so caught up paying everyone else that we often forget to pay ourselves. The first thing many people do when they get paid is to send their money straight to someone else. This is so normal that many people, myself included, have automatic transfers set up. I cancelled my automatic deductions and put away 10% of my pay into a special account. I called this my wealth building account and this money was not to be spent. It wasn’t even a savings account for a holiday. It was an account to build my financial wealth.
  3. I created a plan.
    In addition to paying myself, I transferred money to a savings account. This was my money for a holiday or something big I could really look forward to spending. The savings plan I chose to follow was the 52-week money challenge.
  4. I stuck to the plan.
    The way the 52-week money challenge works, means it became increasingly harder to follow each week. The best thing about it though, was that the regular contributions, which increased slightly each week, fostered belief in the possibility. It was easy to get bogged down with the week-to-week but when I looked back after six months, I was surprised that I’d found a way each and every week. This experience provided me with a great lesson for life in general.

Life is full of ebbs and flows. It gets hard sometimes. To get yourself out of hard times you need a plan. That plan gives you hope. Add to that persistence, and those three things can get you out of almost any adversity.

What have you learned from adversity? Leave your answer below.

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About Jacob Andreae

About Jacob Andreae

I write and speak about Fitness, Nutrition and Mindset. 

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