How to Become Free From Debt [guest post]

highline trailAlmost any form of debt is antithetical to the Foundry lifestyle: credit card debt and car loans are out of the question; college and home loans are a maybe, but should be avoided if possible. If becoming financially independent is akin to climbing a mountain, taking on debt is like leaving the trail to take a crap in some poison ivy.

Not having any personal experience with debt puts me at a disadvantage when it comes to writing about the topic. Luckily, Foundry reader Randolph Warner offered to write up some tips on getting oneself out of debt. Randolph writes about personal finance and business. His most recent work is focused on helping people earn Master of Finance Degrees.

Take it away Randolph…

Freedom from debt is something that many people are seeking. Nothing about pulling yourself up out of a financial hole is easy, but there are many steps that you can take to make the process a little simpler. To give yourself a little bit of assistance, here are a few tips to help you along your path to regaining financial freedom:

Assess The Situation 
Many people know that they are in great financial distress, but really do not have a lot of specific knowledge regarding their situation. The best thing that you can do is to gather up all the information you have, including the current bills you are receiving and the information that can be obtained from your credit report to get a complete list of what you owe and to whom you owe it to. Then, you can see where you’ll be 6 months, even a year from now, assuming things stay the same.

Start Small 
Take your newly acquired budget and order all your expenses so that the smaller amounts are at the top of the list, and put the rest in ascending order from there. The game plan is to start making payments on these smaller amounts to begin paying off items that you have to check them off of your list. With each of these paid off things, your credit score then has room to improve.

Get Some Help 
Many services are available to give people an opportunity to lower their overall debts to specific collectors. Consider how much easier it might be for you to pay off a bill if it had hundreds of dollars shaved off of the total amount. These services specialize in bartering with companies to get them to settle at a lower amount, which could theoretically save you thousands of dollars, depending on the current debt situation you are in.

Pace Yourself 

This is not a problem that you are going to be able to solve today. You have to take some time to figure things out and make changes. Professional assistance can help save you a lot of money, but it still might not be something that you can take care of all at once. Pace yourself and ensure that you are not putting significant financial strain on yourself to take care of this, which could result in a cyclic return to debt in the future.

Avoid Traps
All kinds of things play a role in reducing debt. Some people think debt consolidation loans are the way to go, but these carry problems of their own. Never leap at an opportunity like this, no matter how promising it may sound, as it could have severe consequences for even the slightest mistake or setback.

Seek advice from a professional who can give you a sound approach and a plan to get out of debt that can work with your current budget limitations and a time span that you can live with. It is not an easy road, but one that you can easily travel if you take the right steps.

Thank you, Randolph! Great article. The only thing I would add is that even if you’re in debt, you should still have a small emergency fund. Having said that, I can’t stress how huge of a financial emergency it is to be in debt. Do whatever you can to get out of that situation, as it will set you back decades on your path to financial independence.

Lifetime Gym Membership: $10.99. Not being able to make excuses any more: Priceless.

you are your own gymAs much as I love running and cycling, I’ve never really been a gym kind of guy. It’s not just the crazy prices, but also simply getting to the gym, and the sweaty equipment, and the lukewarm showers, etc. I bought some dumbbells a few years ago to do arm workouts at home, but they mostly sit unused under the couch.

Recently, I heard about a workout program called You Are Your Own Gym, that uses “bodyweights” (pushups, situps, etc.) and common household objects to give you a workout. I checked out the book from the library and loved it so much, I bought the book!

Yes folks you read that right, I actually bought myself a book! I can’t remember the last time I did that. The way I see it, I spent $10.99 for a lifetime gym membership, since I don’t ever see myself needing to step foot in one again.

What I like about the exercise program is that it requires creativity. No chin-up bar? Use a door. Instead of dumbbells, bicep curls are done with a towel wrapped around your foot (pulling up, against the weight of your leg, provides the resistance).

And the part of this book that I LOVE has nothing to do with exercise at all. It’s about getting rid of your excuses. The author asks you to list all your excuses for not exercising, so you can see them for what they are. After doing that, I’m very motivated and have only missed a single session since I started. The same technique could be applied to breaking through the mental barriers preventing you from making any positive change in your life!

I’ve been doing it for about 2 months and the differences in my strength and physique are noticeable. Who wouldn’t like to be a little stronger and sexier? Check it out (literally, at the library) if you’re interested in starting a workout routine but you don’t like the gym.