Transitioning From Debt to Abundance
The Corridor of Transition
Transitioning from debt to abundance is one of the simplest things to do, yet one of the hardest things to pull off. It is not hard because the steps are so difficult, nor because you need a degree, or that you have to have an extremely high IQ. It is difficult because you have to walk through the corridor of transition.
What is the corridor of transition? It is the extreme discipline that is needed to get from where you are to where you need to be. Consider the airplane. Once it is cruising at 30,000 feet it really doesn't put very much stress on the plane. It's the transition from sitting on the ground to being airborne that is the most difficult.
Consider being overweight. It doesn't take a lot of effort to be fat nor does it take a lot of effort to be thin. What takes a lot of effort is transitioning from overweight to proper weight.
You see, the very reason you are heavy in debt is because of "you!" I know that there are the cases of exorbitant medical expenses or something of that nature. But for 95% (or more) of people in debt it was because they just couldn't say no or their decision making process is poor.
Just because you want to get out of debt doesn't mean you will start saying no and/or start making good decisions. That's why, in this corridor, extreme discipline is required. You have to control "you" and that is a LOT easier said then done.
One of the very first steps to making the transition is very similar to starting a diet, a workout program, or any other life changing event. You have to ask the question, "Do I Really Want to Change This?"
Some time back I started a drug and alcohol rehabilitation program that is still in operation today. One of the keys to our success is in NOT accepting everyone. We screen the potential residents to determine if they REALLY are ready for change. Every single person that comes to us wants their life to be better, but only a handful want it enough to make the tough decisions that effect change. Once you make the tough decision the corridor is a lot easier to travel through.
Below I will identify three critical steps for transitioning from debt to abundance once you really have made the decision to change.
The First Step Is Always the Hardest
With our first step you are going to have to live off of less then you make -- end of story, no excuses!
Most everyone will give up here because this is exactly why they are heavy in debt. This is exactly why the corridor of transition is difficult. They want a lifestyle that is better then what they can afford. But it doesn't end there because in order to do this you are also going to have to live below what you can afford, which makes this a doubly rotten step.
Think about it for a moment. If you just bring your life back in line with your income you will remain where you are. If you are wanting to move into abundance you are going to have to start liquidating the debt that you have which means you have to create excess.
This can be done by getting another job or getting rid of all unnecessary items of life. Unnecessary includes paying for TV, internet, cell phones, etc. These are all luxuries not necessities! You want to think long and hard about this. Even the Bible tells us that we should count the cost before we enter into a project because if we don't we will look like a fool.
Killing the Giant
In the story of David and Goliath young David runs toward the giant with his slingshot even though the giant is mocking and making fun of him. With debt we must do the same thing. David had a plan. He went by the brook and gathered some stones, took his slingshot and his staff and took off running in the direction of his target.
Without a plan you will never get anywhere. You need to know what you need to pay off, which debts you will pay off first, and what your goals of assets that you want. Make a plan and then start working the plan. Your plan should included a detailed list of:
- Your current income and expenses
- Optional methods of creating additional cash
- Which debts to pay off first
- Setting aside an emergency fund of cash that you don't touch except for emergencies
- Savings and accumulation plan
Your brain will want to tell you that you can't do it, but believe me you can. My wife and I, when we were young and stupid, found ourselves over $70,000.00 in debt. When life came crashing in on us we sat down and made a plan. At first it seems like we were going no where, but in 18 months we were completely debt free with $27,000.00 in the bank. It was a great feeling.
The 18 months was not fun. It never is until you complete the process. The key is starting because nothing will ever happen until you take the first step.
Stop Wasting Your Money
People are flat out stupid with money. I know people who struggle financially but can come up with money for an iPhone. A neighbor down the street from me rents a 2,200 square foot house and drives a $60,000.00 car -- whose he trying to impress?
Depreciating assets suck your wealth. When you are trying to transition from debt to wealth you have to cut your spending on depreciating assets. A car is a depreciating asset that sucks more people's income then probably anything. Suck up your pride and get rid of the Bimmer in the drive-way, nobody is impressed with it anyways. When you get your life in financial order you can drive the fancy car, but pay cash for it.
Very few things in life go up in value so it is easy to figure out what a depreciating asset is. Put your money in things that increase in value and let time be your friend. When you start building assets then your money begins to work for you.
I'm not saying that you can't have fun, but as Dave Ramsey says, "If you will live like no one else then you can live like no one else." What he means is discipline yourself to start building an asset base you will come to a place where you can enjoy life like very few people do. While it may be a foreign concept to you right now, but having wealth is a lot of fun. Winning with money is very rewarding. Being successful is very stimulating.
Part of the problem with transitioning to abundance is that people try to take their undisciplined lifestyle into their new lifestyle. They just buy things because they want to buy things. To live at a higher level you are going to have to obtain a higher level of thinking and the only way you can do that is with learning.
As for me I hated school, but I have found that learning is actually very interesting and a lot of fun. If you know absolutely nothing about money get some of Dave Ramsey's books and CD's. He is very basic and easy to understand while motivating at the same time. Robert Kiyosaki of Rich Dad Poor Dad is another. What is interesting about these two is their views of wealth creation are totally different and you can see two different styles of creating wealth. But you need to learn, learn, learn if you are going to live differently and successfully transition to the life of abundance.