Change Comes When You Change Your Mind
If spending $10,000 a year on interest payments wasn’t bad enough, I spent thousands more working with a credit consolidation company. It didn’t work. That was my fault. Nothing will change your financial life until you change your mind with this simple tool.
1. Change your mind
When we were drowning in debt, we looked for any way to pay our debt off fast. We considered credit consolidation, refinancing, bankruptcy and even borrowing from our 401(k)s.
The credit consolidation company I worked with was credible, had reasonable fees and tried to help me. The problem wasn’t them.
The problem was me.
I hadn’t changed my mindset by the time I hired them and, therefore, hiring them was money out the door. I was fortunate, as I’ve read horror stories about debt consolidation companies. Have you considered debt consolidation?
Have you considered filing for bankruptcy? Eight-percent of American who file for bankruptcy file more than once. On the one hand, that’s low. On the other, with as severe as bankruptcy is, I’m surprised anyone files for bankruptcy twice.
Having spent my adult-life in finance, I’d have to be in dire straits to borrow from my 401(k). So, I’m surprised that one-third of Americans even do this. Have you considered borrowing from your retirement savings?
These are all options to become debt free, some better than others. Every single one is serious.
Every. Single. One.
Not being in the right frame of mind when trying any of these or other options could make a dangerous situation worse.
How do you change your mind to be in the right frame of mind?
2. Start with your goals and dreams
Don’t you love dreaming about bigger and better things? We do! Think about the last time you bought a lottery ticket. The best part about having that lottery ticket, as most of us never win, is dreaming of what we’ll do with our multi-million-dollar winnings.
If you need to change your mind, start with your hopes and dreams. What’s on your bucket list? Where do you want to travel? What does retirement look like?
Beginning here will start to change your mind towards the future possible and away from the current inconceivable. This Hopes & Dreams worksheet will walk you through getting clear on what you truly want and not what you think you should want or what others want for you. Until we did this, we were living up to the gay cliché, and everyone else’s expectations and that was a recipe for failure.
3. Figure out what you need to achieve your hopes and dreams
Once you’ve figured out your big goals and lofty dreams, figure out what it’ll take to make them come true. This exercise invites you to dig deep and consider what’s truly preventing you from having the life you want.
What got you into your financial predicament? Are you spending more than you earn? Do you have too much house or car? Did you make poor investment decisions? Is it the result of losing a job loss or because of a medical issue?
Once you uncover the root cause of what’s keeping you from achieving your hopes and dreams, then figure out what you can do to overcome those obstacle(s). Will you need to increase your income? If so, how? Do you need to save more, spend less or invest more? If so, how will you do those?
This exercise is hard because it’s only successful if you correctly and honestly uncover what’s blocking you from your goals. Being honest with ourselves can be hard. Not being honest with yourself will only lead to more financial struggles. That’s why you want to identify your financial blockers, which you can do with this guide here to help you dig deep into how you got to where you are today.
4. Figure out what you’re willing to do to achieve your dreams
Finally, contemplate what you’re willing to do to make your hopes and dreams come true. How far are you willing to go to achieve financial independence? How much are you willing to change your mind and yourself to be the person you want to be?
So, we created our ‘What Are You Willing to Do?’ Worksheet. This exercise will help you get clear on how committed you are to your hopes and dreams.
You may feel that achieving all your hopes and dreams is more than you can accomplish. Start simple. The only way to eat an elephant is one bite at a time – don’t eat elephants. Even if you only work towards one goal from the first exercise, create a plan and accomplish that goal. After you achieve that goal, work on your next goal and then the next and so forth.
Start with small steps to improve your financial situation. As you progress and regularly check-in with yourself, your partner or spouse, work towards your loftier goals. When there’s evidence that you can make financial improvements, even small ones, you’re creating new experiences and rewiring your brain to believe that you can and are financially successful.
That’s when you start to change your mind.