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Full article: http://blog.penelopetrunk.com/2014/0...ding-you-back/
13 Ways to keep debt from holding you back
I have tons of debt after launching four companies. There has never been a launch that didnt mess up my personal finances. Most entrepreneurs have no credit I am like that as well so I have learned to live with debt and without credit. This is what has enabled me to take risks, set lofty goals, and go after dreams that lots of people tell themselves their debt precludes.
How do I do it? Its all mental. Here are thirteen ways to think about debt to keep it from ruining your life.
1. Compartmentalize.
When youre saving for a house you still buy food. When you go on vacation you still expect to buy a car in the next ten years. Thats compartmentalization. We compartmentalize our financial requirements to enable us to have a long-term goal and fulfill short-term needs too. Get a money-allocation system in place that will keep creditors from calling all the time, and then stop thinking about it. Do that system and any money left over put toward your bigger goals.
(For a visual explanation of compartmentalization, see the photo up top. Last year I set aside the fact that our house is missing siding and I used that money to build a new section in my garden so I wouldnt miss spring planting.)
2. Make deals and stick to them.
You can negotiate with anyone. Most creditors are used to negotiating payback plans its part of the business of lending money. So propose one you can manage without too much duress. If they say no, then tell them to take you to court. They rarely will. Instead theyll likely just accept what youre offering. Even if its the IRS, if you show that you are offering what you can pay without ruining your life, theyll take the offer. Then stick to the agreement. Consider it a tax for living. And then you can go on with your life.
3. Give up the idea of retirement.
Retirement is an idea from the 1950s when people hated their work. Today you can find fulfilling, engaging work with no need ever to stop doing it. Most baby boomers could not retire, but it ends up that not retiring is a better way to live the end of your life you remain engaged and relevant and involved. We do not need to aspire to having a pile of money at the end of life, so then continuing to pay back debt at the end is not that bad a situation.
4. Realize you can take back the debts power.
At big milestones like graduation, marriage, kids, we can choose to feel optimistic or we can choose to focus on our fears. When it comes to our outlook, 70% is driven by our genes. But you control the other 30%. Practice being optimistic and happy-go-lucky with your debt. When you practice optimism in one area it ripples into other areas in your life.
5. Dont stop taking risks the price is too high.
One of the most common regrets people have at the end of their life is that they didnt take risks. They played it too safe. Most of your life will include some form of debt. If you put off doing what you want because of your debt you are way more likely to have regrets than if you pay your debt off really slowly, or if you never even get it paid off.
I have tons of debt after launching four companies. There has never been a launch that didnt mess up my personal finances. Most entrepreneurs have no credit I am like that as well so I have learned to live with debt and without credit. This is what has enabled me to take risks, set lofty goals, and go after dreams that lots of people tell themselves their debt precludes.
How do I do it? Its all mental. Here are thirteen ways to think about debt to keep it from ruining your life.
1. Compartmentalize.
When youre saving for a house you still buy food. When you go on vacation you still expect to buy a car in the next ten years. Thats compartmentalization. We compartmentalize our financial requirements to enable us to have a long-term goal and fulfill short-term needs too. Get a money-allocation system in place that will keep creditors from calling all the time, and then stop thinking about it. Do that system and any money left over put toward your bigger goals.
(For a visual explanation of compartmentalization, see the photo up top. Last year I set aside the fact that our house is missing siding and I used that money to build a new section in my garden so I wouldnt miss spring planting.)
2. Make deals and stick to them.
You can negotiate with anyone. Most creditors are used to negotiating payback plans its part of the business of lending money. So propose one you can manage without too much duress. If they say no, then tell them to take you to court. They rarely will. Instead theyll likely just accept what youre offering. Even if its the IRS, if you show that you are offering what you can pay without ruining your life, theyll take the offer. Then stick to the agreement. Consider it a tax for living. And then you can go on with your life.
3. Give up the idea of retirement.
Retirement is an idea from the 1950s when people hated their work. Today you can find fulfilling, engaging work with no need ever to stop doing it. Most baby boomers could not retire, but it ends up that not retiring is a better way to live the end of your life you remain engaged and relevant and involved. We do not need to aspire to having a pile of money at the end of life, so then continuing to pay back debt at the end is not that bad a situation.
4. Realize you can take back the debts power.
At big milestones like graduation, marriage, kids, we can choose to feel optimistic or we can choose to focus on our fears. When it comes to our outlook, 70% is driven by our genes. But you control the other 30%. Practice being optimistic and happy-go-lucky with your debt. When you practice optimism in one area it ripples into other areas in your life.
5. Dont stop taking risks the price is too high.
One of the most common regrets people have at the end of their life is that they didnt take risks. They played it too safe. Most of your life will include some form of debt. If you put off doing what you want because of your debt you are way more likely to have regrets than if you pay your debt off really slowly, or if you never even get it paid off.