How Did We Get Here?

Everybody in debt asks this question at some point.

I was reminded of it when I was talking to a client on the phone yesterday morning. She mentioned how she thought it was great that we are living on one income. She then related how she and her husband live on two incomes, and that their expenses are so high it eats up all the money they earn.

Which is when she said, “I sometimes wonder, ‘How did we get here?’”

I remember finally looking at my debt and asking myself the very same thing. It is a good question to ask, so long as you’re willing to truthfully answer it.

When I looked at my own situation, I realized that a lot of my debt had been incurred in my haste to get rich quickly. I had purchased overpriced home study courses, bought expensive vending machines, signed up for MLM deals, etc. This was a big factor in our debt.

And, like so many people, unexpected expenses contributed to our debt load as well. There were car repairs, hospital bills, and other things that added up over the years.

The good news is this: you don’t have to stay where you’re at. You can decide today to turn things around. You can start immediately by getting control of your spending and eliminating expenses.

It also helps to sit down and tally up all the debt you have. To deal with a debt problem, you must know what the problem looks like. So you need to record all your debts, the interest rates on each account, your minimum payments, etc. Then you can sort your debts in the order in which they should be paid off.

In my own journey, I’ve paid off small, high-interest debts first. I like the feeling of zeroing out an account and the motivation it gives me. And I also like to avoid paying exorbitant interest. That’s why I start with small debts that have high interest rates.

In general, I try to pay high-interest debts first and low-interest debts last. This accelerates your debt reduction and maximizes the amount of money that goes toward paying down principal.

Anyway, if you find yourself asking, “How did we get here?” realize that you are experiencing an awakening of sorts. Now it’s time to answer the question, deal with the causes of your debt, and start your journey to becoming debt-free.