A Loser’s Ultimate Guide to Successfully Get Out and Stay Out of Debt.

Photo by Mark S. on Unsplash

So you’re probably thinking, what can a loser tell me about how to get out of debt? Well, I can’t tell you how not to be a loser or how to be successful, but I can show you how a loser like me got out of 15,000 dollars worth of crippling debt, easily within a reasonable amount of time.

Sounds easy enough? Well, depending on what type of debt you have, it could be easy or challenging. If you have a lot of credit card debt, then it can be easier said then done, but if your just have fixed loans, then you have a lot of the work figured out.

If you have fix loans, then don’t take out anymore, fix loans, and work on paying off the ones you already have. If you have a credit card, then go to cash or debit and limit what you purchase with your credit card. If you have more then one credit card, then don’t buy anything on all your cards except for one (or all of them and only use debit) and then pay the minimum payment every month. If you have cards and a fixed loan, then use only cash and debit and make the monthly payments on time. At first, it might seem hard, but over time it feels like clockwork.

Let’s face it budgeting is unrealistic for most people; instead, only buy what you need, and if you have an untamable desire to buy more then you exactly need, then only buy a small amount of it and make sure it adds value to your daily life. To give an example, I can’t go a day without buying a cup of coffee from a local coffee shop, which hurts my wallet because I could easily make a cup (or two) at home and save myself hundreds of dollars a month. So why do I keep on going almost every day? Well, because it gives me a tremendous amount of value in my daily life, especially now because we live in a post- COVID 19 world. I go for one, to help local businesses and get myself out of the house to get some light and Two, to get some good ole caffeine. So even though I know it will cost me a lot, it adds value to my life in hopes of making myself more productive.

Buying things that add value to your daily life or week is incredibly useful to help in making your workweek or weekend more productive. How? Well, because money doesn’t have a value, so why not buy things that do to help you, like coffee, to give you a boost. Wait, why does money have no value? You’re probably asking. Yes, it doesn’t. Look at this way; money has no intrinsic value; its value comes from whatever the society gives it. So if the U.S. decides that their dollar is only half of what it was yesterday, in theory, they could do it. Money (even debt in sorts) is a fiat currency, which means “Fiat money is a currency established as money, often by government regulation, but that does not have intrinsic value.” according to Wikipedia. “Fiat money does not have use value and has value only because a government maintains its value, or because parties engaging in exchange agree on its value.” according to Wikipedia. So it is okay (and should be encouraged) to buy things that add value to your daily lives. Buy that coffee, or a book, or whatever you need to add value. Use something that has an ever-changing value (like money) to buy something that has an intrinsic value (that rarely changes) to help you make more money to get more out of debt.

So unless you have payday loans or get your money from a loan shark, you should be able to work with your lender to work out a better deal for yourself. Most credit card companies want you as a customer, so they will be willing to work with you to help with your situation and possibly lowering your interest rates, credit line, and maybe forgive or reevaluate unnecessary fees. Most banks and lenders can help out. So why do it? Well, because why not, it will help you.

The other reason why is because going back to what I said earlier about money having no intrinsic value; well, it also loses value every year at usually at a rate between 2–5% due to inflation. (depending by country and region and currency). If you don’t know what inflation is, “It is the rise in the general level of prices where a unit of currency effectively buys less than it did in prior periods. Often expressed as a percentage, inflation thus indicates a decrease in the purchasing power of a nation’s currency.” according to Investopedia.

So even more of a reason to try to renegotiate your loans and credit cards now, before your dollar loses more value. One other thing to think about, though, is that even though your dollar loses value, your debt usually does not lose weight from inflation. I mean, yes, it does in theory but not in the practical world because of high-interest rates that help offset inflation and make the banks feel that they will make money on their investment. So it’s a more challenging game to play with these high rates and possible fees, but the good thing is we live in a post-COVID world, so it seems like the banks are trying to help you out, so you’ll stay and don’t default on your loans. So use your dollar now, not later, before the inflation eats its purchasing power.

You should save not just to keep because, as I said above, inflation eats your money away. So it would help if you’re committed to investing your money, because if you invest in the markets or other areas. It should give you a return of 7–12% on your capital, which will help you beat inflation. Another strategy you should use is to have multiple financial accounts. What I do is I have a regular checking account with no monthly fee like the Capital One 360 checking account; then, I also have a savings share and market money account with a Credit Union. (you should too.) it would be best if you did not have a checking and saving with the same bank, because then you will find yourself easily tempted to move your hard-earned savings to your checking for spending, and we don’t want that to happen.

So what you need to do is open a new savings account (usually called a savings share) and money market account with a credit union. Why a credit union? Well, they typically have a savings account that gives a better interest rate and dividends. I use Chevron Federal Credit Union because they offer great rates. The next thing to do is open up a brokerage account and set up a monthly saving transfer of at least $100 from your Credit Union savings. The great thing is you can use it to invest or keep to save it. So why a brokerage account? Well, first, you can invest in the markets. If at first, you don’t want to invest, then you can start saving more securely, because you usually need to do an ACH Transfer to get your money back into your regular checking account or credit union savings. It makes it easier for you to save and not use the money on stuff you don’t need because it is more of a hassle. So it can keep from those nasty impulse purchases. How? Well, ACH usually takes 3–5 business days, which is long enough to let the urge to impulse buy fade away, which in the end, helps you save effectively.

To clarify, I am not a Financial Advisor or CPA, but understand investing is a broad concept. Paying off your debt is an investment, so investing also means paying off your debt, and you can do it by following these steps. But if you also want to invest in the market, use no more then 10% of your savings to support you in the market before your debt is gone. In all, You should always be in the market, but the most significant investment is paying off your debt. Some people say you can’t invest your way out of debt ( like stocks and financial markets), and I’m afraid I have to disagree with them. You can. It’s just very, very hard, and you probably won’t be able to do it. So don’t bank 100% of your getting out of debt process by investing in a stock. Its a helpful but not the sole tool.

If you follow this four-step framework, then you can really and dramatically change your life. They can get yourself financially free of debt and hopefully cause you to have a new outlook on money. I would love to hear what you think about the process! I would love to know your personal debt story. How are you bringing it down and getting out, or how did you get out of debt? What are your viewpoints and outlook on money’s function in the world? I encourage you to comment below, and let’s start a conversation.



Bay Area-based writer and content creator. Focusing on media and politics

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C.R. Pattison

Bay Area-based writer and content creator. Focusing on media and politics