I know what you’re thinking: “WHHHHHAAAAaaaat? Who wouldn’t want to be debt-free?”
Of course you want to get rid of debt – the interest costs, the payments, the strain on cashflow, the stress – right?
No one really wants to be debt-free. Here’s why.
😨 You wake up one day and you realize that you are on the hook for thousands – hundreds of thousands – of dollars of debt.
Not just that, but you also have no guaranteed income. No job, no salary, nothing you can count on. Just a dying business with one, maybe two years’ worth of cash-generating runway if you’re lucky.
You’ve got a product, but no store, no supplies, no employees, no cash reserves, and no support either.
The mortgage payment is due and so is the company’s tax return.
A long line of bills are coming due shortly after that.
⏲️ It feels like a time bomb is ticking inside your head. Stress oozes from your pores.
What do you do?
After a panic attack, you draw a massive bulls-eye on that debt and you put the blinders on. All you can think about is the debt and getting it the hell out of your life.
As you pound the pavement, walking in the dead of night because you can’t sleep, you swear out loud that by God you will NOT let this defeat you.
If it’s the last thing you do, you will be debt-free and damn it all, you will become debt-free fast.
You sell everything you can. If you haven’t used it in the last year, it goes.
Your panic-induced creativity goes through the roof as you brainstorm money-making ideas.
How can you sell the few products remaining in the dying business?
How can you get your hands on more product?
What can you offer that would increase the average sale?
Where else can you sell your product?
You work harder than you have ever worked before. You do nothing but work.
Day in, day out, seven days a week, you focus on making money to pay off debt and you wear yourself down.
Physically, you’re exhausted – but EUREKA! Two years later, you pay off the last of the debt.
You are debt-free!!!
It’s not about the debt
If being debt-free were the real goal, you would be ecstatic. But you’re not.
I know this because the above is my story, of being widowed at 32 and left with $400,000 of debt.
The day I paid off the last of the debt, I poured myself a glass of wine and stared at the fireplace. I had expected to feel ecstatic. I thought for sure that I’d want to celebrate up a storm; that I’d be bursting with joy.
Instead, I felt empty.
Here’s why: I had no idea what to do next. Sure, I had dug myself out of a nasty hole, but I had no direction, no sense of values and bigger goals. I was left feeling rudderless.
Here’s what I’ve learned in a decade and a half of working in the financial literacy space and helping thousands of people strengthen their finances:
It’s not about the debt; it’s about what you want to create in your life.
Debt elimination is just a pit stop on the way to the destination you really want.
And that points back to your values.
Figure out your core values
When you start to tackle your debts, if all you do is make “becoming debt-free” your goal, what do you do next?
What I’ve seen countless people do is revert back to debt, even after they’ve put a heap of effort and time into eliminating it.
In the absence of larger, values-based goals, old habits take over.
But when you know your core values, they act as a framework from which to build your life. They help you determine your North Star.
They tell you that what you may really want is a rich life full of great options.
What you might really value is spending your time doing the things you love with the people who matter most to you.
They help you decide how to spend your two most valuable resources: your time and your money.
Put it this way: If you were on your death bed decades from now, would you claim debt elimination as one of your great achievements?
You’d talk about the experiences you’ve had, the things you’ve achieved, the people you’ve loved, and the difference you’ve made.
And the stories that light you up revolve around the values that matter most to you.
Where to go from here
Becoming debt-free is certainly a worthy goal, but it’s not the real destination you’re shooting for.
As you create a plan to tackle your finances, take the time to ask yourself what you really value.
Why do you want to pay off your debts and strengthen your finances?
What is it leading to?
What’s the real destination?
Using your values to create bigger picture goals will help ensure you never find yourself having achieved your debt elimination goal and feeling completely empty.
Tomorrow, we’ll talk about how to identify your core values.
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