What You Really Need to Pay Off Your Debt

I remember sitting in the window seat flying from San Diego back to my digs in New York City. I’d been in a bit of a financial fog ever since I graduated from college, and though my parents had always instilled in me, “Never carry a balance on your credit card,” somewhere along the way I’d decided to ignore their advice. I’ll never forget the first month I didn’t pay my balance in full. It was November 2005. I figured I’d make up for the couple extra hundred the following month. The following month stretched out to several months.

Before I knew it, I had racked up over $20,000 in credit card debt. I resisted totaling it up for a long time because I was so scared to know the truth. Plus, I was ashamed of myself. What was an Ivy League-educated, resourceful girl doing with all of these credit cards, playing a shell game of balance transfers and paying slightly more than the minimums so as to trick herself into feeling like she was making some sort of progress? I spent way more time beating myself up for the situation than I did trying to do anything about it.

So there I was, on the airplane, handmade paper journal with lavender pages laid out on my tray table. I had my favorite rollerball ink pen (the kind that often explodes on airplanes but is worth it because of how nicely it writes.) I was finally doing some of my homework for Barbara Stanny’s course “Overcoming Underearning.” As I wrote, I had a realization: If I approached my financial awareness from the perspective of doing it as an act of self-love, as opposed to as an act of self-discipline, perhaps I would actually pay more attention to my money.

My credit card and bank account balances, not to mention how I felt about myself, were indications that what I was currently doing was not working.

What if I looked at my financial situation with compassion? 

What if I were kinder to myself? 

What if I forgave myself for previous financial infractions instead of diving into blame and shame every time I looked at my financial past?

It was a simple, yet, profound shift in my thinking. I felt so energized by the realization that I suddenly felt like I could do anything. Soon after, I began to see financial awareness as an honor and a way I was privileged to be able to care for myself. My financial life began to change. And quickly.

I stopped using my credit cards. I started checking my bank account balance every day and consciously practicing gratitude for what I had in there (no matter how big or small the balance was on a particular day.) I started spending less, but not from a place of deprivation. Instead, I spent less and from a place of being super clear on what my values were and realizing that a lot of the things I’d previously spent money on weren’t actually that important to me.

Over the next year I doubled my income. Within about a year of that fated flight I had paid off all of my debt, drastically reduced my living expenses, unravelled my financial entanglements with my mom and was well on the way to having my first six-figure year in business.
Here’s the thing: How we think matters.

Thinking in terms of shame, blame, guilt and fear kept me stuck in debt. Switching to a path of love, compassion, gratitude and forgiveness got me out of it.

People ask me how I paid off all of my debt so quickly all the time. They’re looking for a simple three step plan or some sort of amazing credit loophole that they’ve been missing. But until we change our mindset, it doesn’t actually matter what we do. How many times have you tried to reduce your spending and/or increase your income only to find yourself binge-spending at Barney’s or chickening out when you go to raise your rates?

Until you align your mind with your desired outcome, you will sabotage your efforts to create that outcome every step of the way. My bank account, my credit card balances and my life are living proof.

If you want to heal your financial life, start with love. Stop beating yourself up. Start treating yourself with tenderness. Your bank account (and your heart) will thank you.

Kate Northrup is a member of the DailyWorth Connect program. Read more about the program here.

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