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How many hours of your life are you willing to work to pay off debt?
You can walk into a debt pile in a single day, weeks, or months. But to get out of debt takes much more time and effort. And this is because most people spend more money than they make.
The $30/Hour Analogy
If a person earns $30 an hour and racks up $45,000 in debt in 3 months, it would take them 1500 hours to work that debt off, not including the expenses and taxes that are taken from each paycheck.
You would eventually work off your debt if you worked 37.5 weeks without putting a dime towards anything else (including taxes).
So, you would need to give yourself about a year, but that’s unrealistic.
Giving about 20% of your income to your debt is more realistic since you have bills and taxes to pay.
So if you earn around $1,200 a week and use 20% of that to pay off your debt, that would equate to about 187.5 weeks, which amounts to 3.6 years if you don’t accumulate more debt.
How Much Of Your Life Do You Want To Spend Paying Off Debt
If you’re not careful, your spending habits will keep you in debt your entire life.
What’s the first thing most people do after paying their debts? They get right back into it.
I know someone who paid down all of their debts. What did they do? They didn’t change their financial habits; they repeated their old ones and climbed themselves right back into debt.
Another person had someone pay off all of their debts; talk about a free ride. Next thing you know, they jump right back into their old financial patterns – living above their means.
The 1 Thing You Must Do To Avoid Debt
It’s no secret. You have to live below your means if you want to avoid living with debt your entire life. This is the only way.
It takes tremendous discipline to do this since there are many purchase opportunities, but it can be done. Millions of people live below their means regularly.
If You’re Going Into Debt, Ensure It’s Working For You
There are select groups of people that use debt to their benefit, but most people don’t utilize debt to their benefit; the debt is in control of them instead of them being in control of the debt.
Robert T. Kiyosaki is someone who mastered debt.
He bought multiple properties with credit cards, flipped and sold them for more, or rented out the properties to amortize the debt without lifting a single finger.
Now that’s the way to do it!
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.