10 Mental Barriers to Paying Off Debt: What to Do If You Hate Budgeting

rfz_mental_barriersAt the start of The Debt Movement, we introduced the topic of mental barriers that prevent us from paying off debt. Why? Because even the best-laid plans can fail and, when that happens, we’re left to wonder what to do about it. The fact is, good intentions and solid planning are important but they won’t move us forward without self-awareness. So for the rest of The Debt Movement, we’re going to talk about each mental barrier that prevents us from paying off debt so they can be conquered once and for all. Remember, there’s a lot more to securing a solid financial future than simply crunching numbers in an Excel spreadsheet!

Mental Barrier Number Four: What to Do if You Hate Budgeting

I’ve got a question for you. When you hear the word “budget” do you cringe? I can’t say that I’ve ever heard this word and thought happy thoughts. Why am I telling you this? To let you know that if a hatred for budgeting is your mental barrier to paying off debt, you’re not alone! In fact, this is incredibly common. Let’s talk about what to do about it.

Ditch the Word “Budget”

For starters, let’s just stop saying “budget”. Instead, we’ll talk spending plans. How do you feel about the phrase, “spending plan”? While a budget can feel boring, restrictive, and even old fashioned, a spending plan is meant to be proactive and empowered.  When you create a spending plan, you’re taking the power into your hands to assign a job to your money. This isn’t about restriction, it’s about freedom. Freedom to make money decisions that you’ll be happy with today and tomorrow.

How to Create a Spending Plan

Starting a spending plan is easy. Here’s what you do:

  • Make a list of what you spend your money on each month, excluding the actual amounts. You can even include things you desire to have in the future!
  • Reorder the list based on your highest priorities. Put the things you need and want the most on the top and the least on the bottom.
  • Fill in the amount due for each and subtract the total amount from your monthly income.

How does it look? Was the number leftover positive, negative, or did you break even? If it’s positive, then you can use the extra amount to expedite your debt payoff. If you break even or if your number is negative, review your list. Are there things you can remove – or reduce in frequency – in order to have the necessary funds for your top priorities? Imagine that this is a puzzle and figure out what pieces you can move or take out to make sure the big picture comes together.

The True Difference Between a Budget and a Spending Plan

Confession time: have you been reading this so far and thinking, “this sounds an awful lot like a budget…what’s the catch?” If you have, then I totally understand. That’s because there is one main difference between a budget and a spending plan. The difference is purely psychological. The idea behind making a spending plan is that you’re not focusing on what you have to apply your money towards each month, but what you want to. You are in total control over where your money is going!

You may say, “I really don’t want to spend my money on debt payoff” and I would agree. But, do you want to be free from the burden of debt? Do you want to reach a day where your money is growing in a savings or investment account rather than shrinking due to interest on debt? For me, I want to get rid of debt more than any other financial goal. That means the money I apply to debt is money that I want to go to that goal, rather than simply letting my money go who knows where if I don’t track it. (Yes, if I don’t track my spending, I’m always curious about where my money could have gone by the end of the month, sometimes sooner.)

So remember that creating a spending plan is putting yourself in control to decide where you want to spend your money. If you look at your list and see that you have money going to things that you could do without, or could easily save money on, then why not do that and put more money towards the goals you really want?

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Final Note: Review Your Priorities Often

A spending plan won’t do much good if you don’t track your spending. Track your spending each day and keep tabs on where you are in the amounts you’ve given to certain expenses. Then, review your spending plan every three months to see your progress. As you reach certain goals like paying debt off, that money can be applied to your other goals or maybe even to new ones.

The point is, the more intentional you are with your money, the more empowered you will feel in your financial situation. There are few things more frustrating than wondering where your money is going or why it’s taking so long to reach your goals with no clear visibility into what’s happening. Take the power in your hands and start having fun with your finances!

Stay tuned next week as we move on to mental barrier number five. And don’t forget to join The Debt Movement and help us reach the movement’s goal of paying off $10 million of debt in 90 days!

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