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This chapter is from the book

Five Steps for Today

If you remember one thing about debt repayment, it's this: The reason to pay down and eliminate your debts is that it opens up a great deal of personal freedom in your life—freedom to change careers, freedom to try new things, and freedom to take advantage of opportunities. These freedoms are essential to the ideas covered in the rest of this book.

Debt is the opposite of freedom—it reduces your opportunities and leaves you with a sense that your life is out of your control. You can't lose your job. You can't make a career change. You can't move to a different city. You can't say no when your boss demands more overtime.

Break Free

Here are five steps you can take today to get started on repaying your debt:

  1. Schedule a talk with your partner or spouse. None of this matters if you're not on the same page and working toward the same goals. During this talk, allow things to be an open book—no hiding secret plans, no hiding financial mistakes. Instead, strive to find out your real financial state and discover the goals that you have in common.
  2. Make a list of all your debts. Simply cataloging all of one's debts goes a long way toward making the situation real and tangible. This will likely involve digging through statements, checking websites, and perhaps making a phone call or two.
  3. Think about the stuff you own that's unnecessary. Ask yourself if you really use some of the items you have or if you keep them around solely for sentimental reasons. If it's for sentiment, ask yourself if the memories exist in that item or if they exist in your heart.
  4. Make a list of the things you hope to accomplish in life. What five big things do you hope for in your life over the next five years? Once you've got those down on paper, ask yourself what needs to happen for those things to be achieved. You'll likely find that these things you dream of are much, much easier to accomplish if you eliminate your debts.
  5. Recognize that it's not hopeless. Many people feel overwhelmed by their debt load—I know I certainly did for a number of years. It's not hopeless—nothing ever is. Just stop, take a deep breath, and start looking through your entire life situation with a careful eye. You might just be surprised at what you'll find.
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