Delusional. That’s how I’ve been for a while. 2008 was probably the first year I used the shovel to dig out of my hole and not dig deeper. It happened out of necessity, really. Living with the IRS and the specter of having them levy you at all times will do that. But I was still treading water.
How could that be? I was making good money. But I was trying to fill a bucket with a hole in it. Never was gonna happen. The drowning feeling, the mystery surrounded me for years. I had plenty o good moments. And last year, I cut my debt from 6 figures to 5 figures. (Presently, including EVERYTHING, ~$80k and we’re gonna have a full & final accounting shortly).
I’ll tell you:
- No Accounting: To this day I have no clue where my money went. I would mindlessly buy $20 worth of nothing at Target and then go home. I had no coherent plan (still in its nascient form). I would put stuff on the debit card. Solition: A “no exceptions” cash only policy.
- Trying to do too much/not having patience: I tried hard to pay it all all at once. I moved the hell out of the needle on the IRS, but everything else was chewing me up. My cash position bit. I wanted to pay all of everything. I knew–last year at least–that the problem was acute. I didn’t have a way to pay it. Solution: (see paragraph)
- Not declaring victory. It’s gruelling paying off debt, being cash starved. Last year, I paid off a bunch through surrender of retirement and other means. I moved my net worth, too, even considering the tax penalties and bloodbath that was the market. But I didn’t celebrate, say when I hit milestones. (The big one that’s coming is this: IRS < 25k). Solution: Figure out a reward, and feel good about it.
- Denying Reality: I do have ability. I can sell. I can help. I have had 35,000 months more than once. But, I would double count my months and pipeline and not be finely in tune with what I was making, had made and was about to make. This meant that I always thought that a massive payment-to-debt was a day or two away. It never came, and I continued to tread water. Solution: Read The Simple Dollar and then go get Your Money Or Your Life. Even 1/2 way through it it’s UH-MAY-ZING what a difference it makes.
Solution to #2: I had a bunch of debts that weren’t going anywhere. I let them be. So, I had a $1200 credit card balance that was lingering for months. Initially, I went to a revenue system. 4% of my top line revenue went to that payment. That was a big help. If I got a $1,000 check? 4%, baby. $3,000 check? 4%, baby. That was the first technique that pulled me out, because honestly, if you got whacked by 4% you’re probably not gonna feel it.
The second way I solved the problem was something I learned from @philiphodgen. Daily payments. Take debt divide by 100. I just started initiating that one with a $4700 debt. I’m 12 days in, and I’m doing 3% gross revenue and 47.00 a day. I’m held more accountable to this than I had been in the past. It’s a blast seeing that my debt is going down quickly.
I’ll move on from money tomorrow,
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