Getting Out of Bad Debt

When I was 29 I was defaulting on 2 student loans and had charged up a credit card. At that point i could care less about what I owed to the US goverment loans department. I figured i wasn’t hurting anyone, good old Uncle Sam could take one on the chin. Since then, some things have changed in my way of thinking.

Coming from a middle class family, using credit and spending beyond my means was what I learned growing up. I didn’t see any need to change until i realized I was a financial disaster. In my quest to turn around my finances I came across the book, Rich Dad Poor Dad. After thoroughly brainwashing myself with Robert Kiyosaki’s literature I lost the desire to spend all my money irresponsibly.

Shortly after I discovered how much interest I was paying to the bank on my credit card. Although I can’t remember how much it was I remember how stupid I felt for paying all that extra money to the bank each month. I cut up the card that same day.

Banks and government love financial ignorance because this is how they take our money. Banks especially love financially irresponsible people, they clean up on loans, credit cards and interest payments.

Shortly after I took out a bank loan to pay for my outstanding school loans and credit card debt. The interest I was paying on the loan wasn’t great either but it was better than the credit card, and making small monthly payments to other side of the ocean for the school loans was a big hassle i wanted to fix.

I wasn’t in as bad a shape as many people as I only owed around 9000. I didn’t have much income but i paid a high monthly amount of €300 for 3 years to liquidate the debt. When you think of having to pay €300 a month it seems like a lot, but the months go by and the debts gets paid. The bottom line is that time will go by anyway, no matter what you do. If you make smart financial decisions time will favor you. Most people can’t think that far ahead, as if in the future they don’t want prosperity in the same way they do today. They are not willing to make any changes or sacrifices for a better future.

My biggest achievement during this period wasn’t getting out of debt. My biggest achievement was curbing my spending habits and learning to spend within my means.