Most decisions in life begin with a major event. A major event that triggers an emotion within you that moves you to do something. A majority of decisions dealing with personal finance and debts are made when you reach the point of no return. When you simply can’t take the situation you are in financially anymore. It is a visceral feeling of helplessness that drives a decision to change your life.
Some people, like me, decide to dive head first into becoming debt-free. We do as much research as humanly possible. We read every article in existence and look at every debt-free program on the internet. What do you think they see? They see programs that tell you to throw all of your extra money at your debts, don’t go out to eat, live on beans and rice, etc. These programs are known as “extreme” personal finance programs and, damn right, I was all-in when I started out. I wanted these debts paid off and I wanted them paid off as quickly as possible.
I made my monthly budget and had it don to the dollar. I zeroed that budget out and knew where every dollar was going. I did have some money budgeted for eating out and some entertainment, but that never really happened. I always felt guilty because that money should be going toward my debts. I would turn down invitations from friends and colleagues, including my boss, to go to lunch. I was like a bulldog with my money and the gatekeeper of the finances for my family.
Let me tell you what the outcome of this was a few months into my debt-free journey. Beside the fact that I was getting edgy and grumpy because I couldn’t spend any little amount of money, my family was literally ready to rebel against me. Not that my wife didn’t want to pay the debt off. She was definitely in this game to win, but the tight restrictions were causing almost just as much tension as the debt was.
My colleagues, boss, and friends understood my goals to a point, but they were not in the same mindset. They just wanted me and my wife to come out with them when they went out. It didn’t matter if we ordered filet mignon or a grilled cheese. When I kept turning everyone down, it came off as very stand-offish. This, subliminally, could have cost some friendships or a promotion at work if my boss was not the type of person that he is.
I also noticed that I became more obsessed with the actual idea and process of paying the debts off, then with the actual reasons of why the debt was there in the first place. Most programs are so focused on the immediate every dollar goes to paying off debts and then investing. Cool, I love it, but how do you live on a daily basis and change the habits you had that got you into the debt?
That is almost like going on a crash diet to lose a bunch of weight quickly. Once you lose it, you don’t know how to eat on a daily basis. The program was not designed to be sustainable for a lifetime. “Extreme” personal finance helps you lose your debt “quickly”, but may not be sustainable for a lifetime. You need to change your existing financial habits and develop new ones. You need to change your feelings about money and how you use it.
I am not saying that “extreme” personal finance is bad. Used with a program that changes our lifestyle habits, it is a great tool. That’s right, a tool. Not a solution by itself, but a piece of the puzzle that could help you become and stay debt-free.