Is It Really That Important To Get Out Of Debt?

Debt can be a powerful tool to help us manage our obligations and pursue our goals. Debt allows us to own nice homes and drive nice vehicles while paying for them over extended time periods. It allows flexibility with our spending choices and leverage in negotiating. Most of us recognize, however, that debt can quickly become a burden, or a swamp – dragging us down and making it feel impossible to escape ore move forward.

That’s why so many experts focus on establishing clear debt free living goals. Some of them have great ideas and offer practical tools to help you get out of debt and there’s absolutely nothing wrong with that if they work for you and set you free. We share many of the same ideals and ideas ourselves all over the various Goalry blogs.

Then again, maybe eliminating debt isn’t a realistic, or even a desirable, goal for everyone. But establishing a meaningful debt management goal certainly can be. Having debt repayment goals is essential to any long-term planning, whether we intend for those plans to be all about finances or not. If we don’t establish and stick to an effective household budget and commit to a clear “paying down debt goal,” it will be much, much harder to accomplish anything else we claim we want to over time. As with any other sort of progress – losing weight, improving relationships, getting a better education – all growth starts with honesty about where we are and what we want.

So let’s talk some real talk, shall we?

How To Get Out Of Debt?

The best get out of debt plan is to avoid unnecessary or unproductive debt in the first place. That’s a large part of why we started Cashry, Creditry, and Loanry as foundational elements in the Goalry Family of Unified Finance. Our blogs and online tools aren’t just about connecting with lenders. It starts with educating ourselves about different types of debt, and the pros and cons of each. The more we understand about the different ways interest rates are computed, the factors that shape our credit score, and practical ways we can avoid so much debt to begin with, the better we’ll be able to make useful choices about that debt.

Here’s a difficult reality about debt, however: it will probably take more work than you’d like upfront to make it happen and take longer than you’d like to see positive results from your efforts. Imagine a genie willing to grant you infinite wealth, but only $20 at a time, once per day. That’s still over $100 a week (and over $7,000 per year), but if you’re $25,000 in debt, it still feels like very little is happening by way of measurable progress. Except that it is – assuming you use every one of those $20 bills as specified in your debt repayment goals.

Learning to lower your bills is an essential part of meeting your debt management goal, but it may not feel like $10 a month here and $15 a month there are enough to make a difference. By themselves? Maybe not. But as part of your overall debt payoff planner? Absolutely! Educating yourself on the Debtry blogs about the best way to pay off credit cards may not feel like it’s turned things around for you in the first few months. But sticking to your budget and maintaining your focus? Over time, the changes are huge.

The big stuff matters, too, of course. That’s why we focus so much on educating yourself before financing a vehicle or taking out a home equity loan. That’s why we strive to connect you with the most practical options for your circumstances when it comes to insurance or personal loans. It’s why we keep bugging you about your credit score, which – fairly or not – dramatically influences just about every other financial decision and opportunity you’ll have.

Revising Your Debt Payoff Planner

Here’s another difficult reality of any “get out of debt plan”: sometimes stuff happens that messes up the plan. It may not even be your fault or in your control. You’re injured in an accident. A primary breadwinner loses their job. Divorce. Pregnancy. The economy. A pandemic. Plan on not everything going according to plan. Benjamin Franklin once famously said that the only two things in life about which we could always be certain were “death and taxes.” Sometimes it seems like perhaps he should have said “debt and taxes.” Dying may not be something we look forward to, but at least it’s free – well… for us, at least.

Finally, one last reality of your quest to get out of debt: it starts with you and your partner (if applicable) sitting down and having some difficult conversations, and working together on something we all know we need but far too few of us actually create and use – a real life budget. You can read more about making and using a budget effectively, but the short version is this: it’s time to account for every dollar that comes in and every dollar that goes out and make hard choices about what’s truly important to you. Most of us tell ourselves we know where our money goes. If that’s true, making and sticking to a budget shouldn’t be any problem. The reality is, however, that most of us play all sorts of little games in our minds to avoid thinking clearly about how we spend our money.

It’s your money – we’re not interested in telling you how to spend it. Nothing in your budget is about anyone else telling you how to spend it, either. An effective budget is about being honest with ourselves about what our spending priorities must actually be based on the numbers in front of us. Then, if we say we have (or want) different priorities, we can more effectively decide which numbers need to change or get moved around, and exactly how. If we’re unable or unwilling to do this, we’re not really that interested in getting out of debt or taking more effective control of our own finances. We just want to keep pretending we are.

We promised real talk. We didn’t promise it would make you like us right away. Give it time, though. Think of it as “tough love.”

Organizing Your Debt

So all debt is the same in some ways, and all debt is unique in others. Otherwise, things would be too easy and what fun would that be?

How can Goalry help you navigate and manage your debt? More importantly, how can we help you see your efforts to get out of debt as more than survival – more than enduring that burden or escaping that swamp? How can your debt repayment goals work together with your other financial goals towards a better life for yourself and those in your care?

First, we encourage you to set aside time each week to read up on the types of debt most impacting your life right now. The blogs at Debtry and across Goalry are intended to lay out complex ideas in plain, simple English, making them accessible to anyone. Check out our YouTube channel as well for similar resources. Check out other reputable sites as well. Everyone has their own voice and perspective, but over time you’ll notice common themes and similar approaches which you can use to shape your own strategies for eliminated debt.

Second, formulate a plan and stick with it. This works best after you’ve taken some time to educate yourself on the type of debt in question. You want to get out of credit card debt? That’s great – it’s a good idea and we can help. Your efforts will be more effective, however, if you understand the unique elements of credit card debt, consider the best way to pay off credit cards in your circumstances and within your budget, and incorporate your “reduce credit card debt goals” into your larger financial planning. Is a debt consolidation loan the best way to go in your situation or should you consider some form of personal bankruptcy in order to get a fresh start? Can your IRS debt goals be accomplished through budgeting and making some calls to try to lower your bills, or should you put off going back to school until it’s resolved? Or maybe it call all be managed as part of an overall plan for paying down debt goal marker by goal marker?

It’s not just about writing some checks and then hoping for the best. It takes time and planning.

The good news is that while we can’t necessarily make it all easy, you certainly don’t have to figure it all out alone. Helping people sort out their short-term crises and long-term goals is what we do.