Success comes in many flavors, and the lessons of achieving success through a process of failure and correction (the Thomas Edison method) apply to all of them, even getting out of debt.
Lesson One: Look for what you can learn from it.
What could you have done differently that would have resulted in a different outcome? What can you do in the future that will result in success, or at least getting closer to the goal?
Take your credit cards. Do any have a balance that you can’t pay off this month? If so, ask yourself these questions. Were the purchases necessary? If yes, why were you not able to pay cash for them? If a purchase was not necessary, do you now regret it because of the stress of having the debt?
Answering these questions will let you know where your stumbling blocks are. Knowing that is half the battle.
Lesson Two: Turn a crisis into an opportunity.
When our debt was at its peak, there was only one thing to do. We made the radical decision to sell our house, before the fact that we couldn’t make minimum payments on everything caught up with us.
With our equity, we paid off about half the debt and put 10% down on a smaller house. In just over four and a half years, it has appreciated by over 30%. In the meantime we have learned to live on our income and paid off the other half of the consumer debt.
Moving from a too-big older house to a new house with no maintenance issues was another benefit. We’re actually glad for the crisis that brought our improper money management to our attention--and a halt--and put us in a better situation.
Lesson Three: View failure as just another challenge.
There have been times when we were near the goal of being out of debt before. We even made it once or twice. Each time previously, something came up and we got out the credit cards or refinanced the house again. That seems to be a pattern for many here in America.
Does that mean we will inevitably do it again when our paid-off car needs replacing, or a medical bill comes up? Not necessarily! I think it’s like trying to quit smoking (I’ve never smoked, so I can’t vouch for the similarities). The fact is, we’ve been addicted to credit for a long time. We’re debt-free except for our house right now. If the car quit tomorrow, we’d have to finance a new one. The emergency fund wouldn’t buy even a junker yet.
We’re working on changing that and you might see it as a toss-up whether we will win this time or the credit habit will. I’m betting on us, because we’ve learned from past mistakes. We did it cold turkey, just like my husband quit smoking over twenty-five years ago.
Lesson Four: If at first you don’t succeed, try, try again.
When you were a baby, you tried to stand up and walk many times before you succeeded in taking a step or two. You didn’t give up then, did you? It is absolutely worth the effort to be debt free. Not only are your finances in better shape, but also the stress of constantly worrying about the bills is considerably lightened.
So if you find you have to thaw out the credit card for an emergency or finance your next car before you’re ready to pay cash, never mind. Crawl over to the nearest piece of furniture and pull yourself up again. You’ll make it! IF you don’t quit trying!
Look for Part Two here.
Cheri |