Outrun Your Debt For Good

Let me tell you a story about a guy who, in a surprising way, is probably a lot like you.

We'll call this guy Dave. Just to be clear, Dave isn't real. 🙃

Dave has struggled with money his whole life. He's always felt like he never had enough. When he does manage to get a bit of money, it seems to go right out the door again. No matter how hard he saves or works, he struggles to get ahead.

Because of this, he's racked up a bit of CC debt, a car loan or two, and he can't seem to make it through a full month without floating something on the credit card.

This has been Dave's reality for decades.

But one day, Dave decides he's had enough. This is it. He's changing his money habits once and for all.

He downloads a budgeting app and sets it up, watches a ton of videos on YouTube, and listens to financial podcasts non-stop. Slowly, he starts to see some progress.

He's watching his debt go down every month. He's steadily seeing a buffer build up in his savings account. And his anxiety around money is decreasing with each passing day.

After 6 months, Dave's paid off one of his small credit cards. He's really feeling good now.

Six more months go by and he's got another card paid off. Pretty soon his credit card debt will be completely gone. He'll be able to focus on paying off his car and even increasing his investments!

Then, something happens.

It's not all at once... it's just a subtle shift toward old, bad habits.

Dave had been checking his budget daily. But now it's more like every few days. He had been ruthless about only charging things to the credit card that he could pay for immediately. But now something extra catches his eye on Amazon, and he goes ahead and adds it to his cart... after all, he'll get paid next week and can cover it then.

Little by little, Dave starts to ease up on the gas pedal he had pressed to the floor for the past 12 months. He starts to relax in his newfound lower financial stress. And the old habits - the habits of 20 years of poor financial management - start to slowly creep back in.

Before he knows it, Dave's racked up twice as much debt as he had to begin with. And now he's feeling more defeated and mentally beat than ever.

He's at a fork in the road...

Option A - Embrace his old identity of "just not being very good with money" and settle into his old, anxiety-filled - but comfy in a familiar sort of way - habits.

Or...

Option B - Recognize that progress isn't always linear. Learn from what got him into his current situation (we'll discuss the problem below), and make course corrections so it doesn't happen again. And encourage himself by reviewing all the progress he made when he was implementing good habits. He had success once, he'll be able to tackle his finances even better this time around!

Do you, like many of my clients, relate to Dave? Maybe you've felt this yo-yo effect of improving your finances and then falling back, never really seeming to make progress. I can assure you I definitely relate when it comes to my health and fitness.

So let's dive into why this happens.

THE PROBLEM

The most common problem with folks like Dave is they don't update their vision or "why" along the way.

When they start out on a mission to improve their finances, their "why" is very strong. Normally they're running away from something. We'll call this the Financial Disaster Monster... FDM for short. 👹

Your FDM could be old debt, or looming retirement without enough funds, or college tuition for your kids. The point is, you have some big, scary financial monster that's chasing you. And you feel like you need to run as fast and as far as you can to get away from it.

And eventually you do. You out-run the monster, and it no longer feels like an eminent threat.

So you ease up. You start to slow your pace and relax a little bit. You stop making big progress towards your goals. And if you aren't careful, you'll slow down so much that the monster will catch back up.

THE SOLUTION

The key is when your motivation starts to wane, you have to transition to running towards something... instead of just running away from your FDM.

Your "why" at the beginning was to just outrun the monster.

Now your "why" must change to run towards the horizon.

The question then is - what's your horizon?

This is what Hanna and I call our Life Vision. It's a document we use to plan our life, and we update it every quarter.

I can't overstate the importance of these quarterly updates.

Most people lose momentum after making a bit of progress, because they forget their vision. They lose track of the connection between their budget and the vision they have for their life. If you want to stop this yo-yoing once and for all, the key is to have a vision so compelling, so exciting, that you want to run towards it and not slow down.

As we approach the end of the year, I want to encourage you to consider not just what you're running away from, but what you're running towards in 2024.

Hanna and I talk about this in depth in podcast episodes #83 and #84. So check those out if you'd like to hear more on this topic.

You can find them on YouTube here and here. Or anywhere you listen to podcasts (Apple, Spotify, etc...)

We hope you have a great rest of 2023. Remember, choose Option B!!
Nick & Hanna

Mapped Out Money Newsletter

Outrun Your Debt For Good

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