How to Get Out of Debt: Dreaming is Step 1

Getting out of debt and changing your financial situation requires more than smart money management. It requires stamina and commitment. One of the best ways to sustain a commitment to change is to focus on what you have to gain. Why do you want a different financial situation? What would you do or be if money was no object?

An analogy might help you understand this better. Liken getting out of debt to losing weight. If you want to lose 20 pounds, which would motivate you more: a focus on giving up your favorite unhealthy treats or the new swimsuit you want to fit into on an upcoming family vacation?

Don’t Focus on What You’re Giving Up

“Ok self, you need to trim down 20 pounds so remember, you won’t be eating chocolate, bacon or cheeseburgers for quite some time.” As 3:00 pm approaches, you get the munchies at your desk and think, “Oh, no more chocolate from the vending machine for me. I’m done with chocolate. I don’t eat chocolate anymore.”

You get the idea. Your internal dialogue and focus is on what you are giving up to bring about change. In essence, you rehearse and replay the price you’ll pay for change again and again and again.

Or, listen to this internal dialogue and see if you can hear the difference.

Focus on What You’re Going to Gain

“Ok self, you need to trim down 20 pounds because this winter when you hit the beach with the family you want to wear a swimsuit in public. It’ll be fun to make sand castles with the kids, to enjoy family time and not be self conscious or worried about your appearance.” As 3:00 pm approaches and you get the munchies at your desk, you get up and walk over to the vending machine to get a candy bar and see your new swimsuit hanging from the front of the machine. “Oh yeah, I am foregoing candy right now because fitting into that swimsuit is more important to me.”

You get the idea. Your internal dialogue and focus are on what you have to gain long-term by making different short-term choices. You keep the end result you want to achieve squarely before you.

Alright, so it’s decision time. Which focus point is more likely to give you the staying power you need to make healthier food choices day after day for the next 6 months? Clearly, the second scenario will keep you committed and engaged longer than the first.

Begin With the End in Mind

Stephen Covey, in The Seven Habits of Highly Effective People, goes so far as to say that one critical habits is to begin with the end in mind. It’s important to have a crystal clear picture of the ultimate goal since, as Covey says, “…all things are created twice. There’s a mental or first creation, and a physical or second creation to all things.”

As I’ve shared before, Michael Beer, a Harvard professor, says that change only comes when a number of things are in place, including a clear vision of how things could be different. Without a new, different future in mind, experts agree that change will not happen.

A Point of Agreement in Your Marriage

There’s an interesting secondary benefit to articulating your dream and reason for wanting to make lasting change in your finances. It is a point of agreement between you and your spouse, or anyone else involved in your finances (like teenage kids, maybe). If you’ve been married for more than 2 days you likely know that money can be a contentious issue in marriage. One spouse can fall into the role of the spending police, that authorizes or denies each expense that the other spouse suggests. In that arrangement no one is satisfied and frustration mounts (ask me how I know – I have been the spending police and it is a crummy job).

Although it isn’t a cure-all, agreeing on what the family unit as a whole will gain by getting out of debt is a first baby step to resolving money conflict in marriage.

I know this to be the case, based on my own experience. My husband and I have had our share of money-related disagreements. However, when we agreed that we want to move to Brazil one day things started to change. We knew that our debt was separating us from that dream, since Brazil is a cash-based society and we would need a significant amount of cash-in-hand to enable a move. From that day until this, regardless of the specific spending or saving decision at hand, we know we share a common goal and that orients our thinking and conversation. (By the way, I have no idea when we will move to Brazil and am not planning to stop Pocket Your Dollars anytime in the foreseeable future, so no need to ask me about it or worry about it).

For us, believing the best of each other by trusting our commitment to the same goal, even when we see different paths for arriving, diffused a lot of tension. Subtle thoughts like, “he is undermining our financial future with that decision” or “she is working as hard to sink the boat as I am to provide” are replaced by a confident trust that each partner is fully committed to the end goal.

What’s Your Dream?

Moving overseas is probably not your dream, but what is? To quit being physically ill because of financial stress? To avoid foreclosure and losing everything? To retire to a cabin on a quiet lake one day? To start your own business? To become a stay at home parent? Put your kids through college? The options are endless.

I implore you, spend the time it takes and invest the energy to articulate your family’s dream. It isn’t a superfluous exercise, but foundational to getting out of debt. I’m telling you that from that point forward, expenses that seemed important a few days ago, will pale in the light of what you’d gain by committing to live within your means, then making and living a balanced life plan.

Next Steps

Naming a dream isn’t a magic cure for eliminating debt and transforming your personal finances. It is the first decision of many that, taken together, change the very course of your life. Next time we’ll talk about some other decisions you’ll need to make if you are serious about getting out of debt.

Your turn: What is your dream?

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