How Quitting This One Thing Turned My Finances Around

Welcome! I'm Pamela J and I'm thrilled that you chose to be here. In this blog post, I share the crucial steps I took that put me on the path to financial freedom: quitting dumb debt. This common-sense, biblical approach to managing debt has changed my life, and it can change yours as well.

What is Dumb Debt?

[If you prefer to watch / listen vs read, click on the video below]:

1. Revolving Credit Card Debt
Revolving credit card debt, including services like Afterpay, drains your resources with high interest rates, sometimes reaching around 17%. Even when you play the game of transferring funds for 0% interest credit cards, the banks still win. Proverbs 22:7 states, “The rich rule over the poor, and the borrower is slave to the lender.” Until you take control of your credit card debt, you will be forever swimming upstream without a paddle. 

2. Unforgiving Student Loans
Student loans are unforgivable in bankruptcy court. The reality is that these loans can feel like a ball and chain, limiting your potential to progress financially. If you have a student loan, t’s critical to tackle the debt aggressively. Even better is to never entertain taking out a student loan as payments begin when you graduate and you may not have even yet secured a job. (Let's just hope your degree is in something desirable in the marketplace for years to come!) My own experience paying off $25,000 of student loan debt taught me invaluable lessons about living below my means, creating and maintaining a monthly budget, and prioritizing my spending (and saving).

3. Car or Lease Payments
Car payments are often seen as a normal expense (who wants to be normal?), but I challenge this notion. New car or lease payments load you with debt for a depreciating asset. Instead, consider buying a dependable car within your means, for cash, or pay the small loan off quickly. I once drove a $2,500 late-90s Toyota Sienna until it died, proving you don’t need to follow the crowd to be successful and you definitely don't need to try to impress people that don't care about being impressed by you.

Action Steps to Eliminate Dumb Debt

Create a T-Chart
Start with a T-chart listing your needs versus wants. Needs include essentials like food, clothing, shelter, and transportation. On the other side, list non-essential "wants" such as streaming services and dining out. Prioritize reducing or eliminating wants and evaluate how you might be overspending on needs. Do you have too much month left at the end of the money? If yes, then you either need to downsize your lifestyle or increase your income, preferably both, so you can reach debt freedom faster and start investing (in real estate hopefully) even faster.

Aggressively Pay Down Debt
Attack your dumb debt relentlessly. Whether it's by focusing on the highest interest rate or the smallest balance, pick a strategy and stay committed. Using tools like my Debt Dumping Tool can provide visual encouragement to stay on track. Pay down your debt with any and all extra funds (from downsizing your lifestyle) and celebrate each milestone.

Stay Engaged and Inspired
Financial transformation can be daunting, but not hopeless. Staying connected with communities like this one can provide encouragement and accountability. Join my monthly newsletter, PJ Insider, for regular updates and tools to help you on your money mastery journey.

Conclusion

In closing, financial freedom begins with eliminating dumb debt and changing your behavior and beliefs around money. Take immediate action by creating your T-chart, becoming a PJ Insider for continued support, and stay committed to your financial goals. As you shed the weight of debt, you’ll start to see your income grow and your wealth begin to build. Remember, financial freedom is possible when you are determined.

Until next time, let’s go to work and transform our financial futures together!

Peace,

Pamela J