Welcome to my home! This is a debt-free learning community. Leave any self-doubt and judgments outside to make room for growth.
Have you ever had these thoughts? I’ll get out of debt when…
- I get that promotion at work.
- I win the lottery.
- My rich uncle, parents, aunt, etc leave me my inheritance.
Ok, here is some tough love for you. More money will not get you out of debt. How many of us have dreamed about becoming famous without a care in the world regarding money?
According to Business Insider the following celebrities have fallen into debt just like the rest of us.
- Upon his death, Michael Jackson was $400 to $500 million dollars in debt. He took out loans in order to spend (it isn’t clear if this was personal spending or business investment). Then he went through multiple expensive lawsuits. Neverland was close to Foreclosure.
- Nicholas Cage may have made $40 million dollars in 2009 but other reports stated he spent around $150 million dollars between 1996 and 2011. His purchases consisted of 15 homes, 50 cars, rare art, yachts, a private jet, motorcycles, etc.
- MC Hammer made around $30 million dollars on the song “U Can’t Touch This.” He purchased a $1 million dollar home then staffed it with 200 workers, bought a horse stable with 19 racehorses, and then went through several lawsuits. He had to file bankruptcy in 1996 due to being $13 million dollars in debt. Yikes!
Also, according to Business Insider, the following lottery winners were in debt 5 years after winning.
- A single mom, a Canadian winner, won $10 million Canadian dollars in 2004. She bought a big house, fancy custom cars, designer clothes, hosted a lot of parties, took exotic trips, gave handouts to family, and loaned money to friends. She is now back to working part-time, riding the bus, and renting a house.
- An American lottery player won twice earning $5.4 million dollars total. All of it was gambled away in Atlantic City.
- Another Canadian winner earned $10 million Canadian dollars in 1998. He bought several vehicles for himself and friends, a house, drugs, alcohol, hosted parties nightly, invested in a failed logging business, and even bought 8 big screen tv’s in a single day for friends. As of 2005 he was working on a friends farm barely making ends meet.
Despite having earned large sums of money they all fell into the same trap…human nature. Our society has learned excessive spending is a way to be noticed, liked, and viewed as successful.
This is what’s burying us in debt!
Look at how much money slipped through the fingers of these individuals. Debt freedom only happens when your bad habits change into good habits. Remember this saying:
“If you always do what you have always done. You will always get the same results.”
I have some new habits I would like you to try to strive for. Only try one at a time. Rome wasn’t built in one day.
Start saying No! In all of the situations above the biggest reason these individuals went into debt was because they couldn’t walk away from a splurge purchase or say no to friends and family. You are the biggest swindler of your money.
Stop using credit cards or at least only 1 if you have multiple credit cards. This will help to slow down your spending habits. Do you reeeeally need that item?
If you don’t have the cash don’t buy it right now.
Only shop for the things you need for the next 30 days. It takes 30 days to make a new habit permanent. This will allow you to see what truly is important to your budget.
Stop buying your lunch every day. Most lunches cost around $7.00 per meal. If you only buy 3 times a week instead of 5 you could save $728 per year. Pack some leftovers from last nights dinner!
Delete your saved credit card information from websites you shop from frequently. Your spending will slow down if you have to enter your credit card information every time.
For paypal and amazon delete your saved login information. I find that to be more helpful for these sites since you have to vet out your card with them to validate it.
Start putting at least $20 per month in a savings account. Did you get a raise recently? Put that in the savings account. This will give you something to lean on if you go over budget.
Starting a new habit is extremely hard. Even individuals with large sums of money struggle with creating good money habits.
But the fact that you are still here means you are willing to try. Which is the first step to being debt-free.
Remember, you are not in this alone!
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