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The Correct Mindset to Have When It Comes to Paying Off Your Debts

By: Brian Kim - November 13, 2008

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Let’s face it. Being in debt is not a fun thing. Chunks of money go off on a monthly basis to pay off credit card debt, school loan debt, auto loan debt, mortgages, etc. Most people would love it if they could pay off their debts and have all that weight lifted off their shoulders. So what do most people do?

They focus on the debt.

They focus on the debt and how they’re going to pay off that exact amount they owe to their creditors.

But there’s an inherent flaw in that kind of thinking. Their intentions are well and all, but if you focus on debt, that’s the scope of your full potential (more on that later).

Also, by focusing on debt, it brings about more stress, worry, anxiety, a sense of helplessness, fear, and all those negative emotions tend to shut down the potential of your mind. It can also get you down and depressed and that can result in bringing about even more debt into your life as you spend more money to deal with those issues.

The focus should not be on debt.

But that’s not to mean you should be ignorant about it. You should do all the legwork necessary first such as consolidating as much as you can on the lowest interest rate you can get, cutting out all your unnecessary expenses out of your budget and applying as much of it as you can to pay your debt down on a monthly basis.

But that’s the extent as to what most people do when it comes to paying off their debts.

The REAL focus, the correct mindset to have when it comes to paying off your debts is to think of how you can increase your monthly income consistently.

That’s where the focus should be.

You want to focus on the OTHER side of the debt equation because too many people focus only on one side of the equation - debt, not on income, especially consistent income that lies on the other side.

If you can consolidate the debt as much as you can and create a regular schedule of applying it down, that’s the extent to how much you should focus on your debt.

The rest of the time should be spent on the other side of the equation because if you do, and your income increases consistently every month, not only will that automatically help you pay off your debt faster, but that money will still be coming in AFTER the debt is paid off.

And when you have all that extra money coming in that you would’ve normally applied to your debt, as well as the money you scrimped from your budget, you can save it and start investing it wherever you like and start to build leverage.

Because most people focus on the debt so much, they get “tunnel vision” and play the debt game assuming that their current monthly income is all they have to play with, and they never bother to research ways of increasing their monthly income consistently, and yeah, they do make chunks of money here and there, selling their possessions, having a garage sale, etc., but it’s not consistent. It’s not consistent because their focus is only on paying off a certain amount of debt. The mindset of the person focused on debt revolves around how they can pay off ONLY that EXACT amount of debt and be done with it. But inevitably, they will get into debt again and they continue in a cycle of never really “winning the game”, but just barely staying in it and keeping their heads above water - just paying off the amount of debt they incurred – never thinking in terms of consistency, but in terms of just paying off a certain amount of debt as a one time thing.

So how can you increase your monthly income consistency?

You can learn new skills or take on more responsibility at work to get a raise at your job. You can work part time building a simple business on the side. You can refer other people to businesses and get a finders fee.

Whatever it is you do, if you think long and hard about it, with the requirements being an increase and consistency in your monthly income, then your debts will be paid off faster and you’ll be able to save more, thereby reducing your future chances that you’ll get in more debt because you have cold hard cash to pay with now.

When you focus on the other side of the equation, namely a consistent increase in monthly income, then you know it’s just a matter of time before your debt is paid off and moreover, you can start to build leverage when you think of consistent ways to increase your monthly income that can increase your income even more.

For example, let’s say John Smith decided to clean apartments as a way of increasing his income consistently. He gets a few clients and brings in a nice chunk of change every month.

Soon enough, his debt is paid off, and with the extra money flowing in, he sees an opportunity.

He sees that his simple system is working, so he invests that extra money flowing in to get more and more clients and makes more and more money, but ultimately, he can’t do all the work himself.

So he hires some people to help him clean the apartments he can’t and pays them an hourly rate and pockets the difference.

Soon he figures all he has to do is sell to potential clients and just outsource the rest of the work.

Then, with all the extra money coming in, he realizes he can hire salesmen to sell to potential clients on his apartment cleaning services and all he’s doing now is collecting checks and paying off his salesmen and apartment cleaners and pocketing the rest.

Had he focused on debt the whole time, it would’ve blinded him to the opportunities that lie on the other side of the equation, opportunities that will help him increase his monthly income consistently AND allow him to build leverage like we just saw.

Because he got a handle on his debt and then looked to see how he could increase his monthly income consistently, he was able to build leverage to the point where he’s not doing the work he was originally doing at all. Now he’s just managing his clients and employees.

So the focus should NOT be on debt, particularly the amount of debt you have and how you should go about paying off that exact amount of debt. You should do all your legwork necessary to consolidate your debt and look at your budget to see what kind of expenses you can do without and throw that onto the debt on a monthly basis, but that should be the extent in terms of focusing on it.

The correct mindset is to then focus on the OTHER side of the equation and think of ways to increase your monthly income consistently and not only will your debt get taken care of naturally as a result, you’ll have more money coming in on a monthly basis that you can then save, invest, and leverage to create even more money, until you find yourself never having to pay off any sort of debt ever again.

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3 Responses to “The Correct Mindset to Have When It Comes to Paying Off Your Debts”

  1. Jan Says:

    I think there is an other solution also

    Debt $ 2400 you can pay each month $ 200 within a year you are debt free why not pay eacht month $ 100 and add $ 100 in a saving account after 2 years your are debt free and have a saving account

    people often start making new debts when they are almost debt free with this solution you can avoid

    and i think when yoy focus in income i will take 18 months to be debt free because you start paying $ 150 for debts and $ 150 for saving account

  2. В кризисе - Правильное мышление помогает погасить долги Says:

    […] Оригинал статьи: The Correct Mindset to Have When It Comes to Paying Off Your Debts […]

  3. Mike Says:

    other solution is that never go under debt.buy anything when you have Cash.when you dont have money,it means you have got the biggest excuse and motivation to go out there and acquire the wealth you need in order to be able to buy ANYTHING you want,ANYTIME you want,only by CASH…

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