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In my experience as a coach, I see people embroiled in the messes they have created in their lives. They don’t like to admit it but many are up to their eyeballs in the 3 M’s: MADE it-MYSELF-MESS. Their lives have become unmanageable and they push away the emotions in order not to feel them. Often they don’t deal with their messes until it becomes urgent.

I believe the first step is Clarity. Getting clear on the exact problem that needs to be fixed is half the battle.  It is often painful to take this step but I find it the most liberating. You cannot fix what you don’t acknowledge.

Let’s dive into Clarity Best Practice Number One.

Get clear on your credit card debt and then pay it off

I retired at age 54 after 35 plus years of working. I was not fired or down-sized. I chose a date, I submitted my letter of resignation and they threw me a bash. My husband did the same at age 56.

I haven’t looked back. After two years of traveling and re-locating to Florida, (I am not a cliche I actually really like it here) I started a business/life coaching practice. But not because I had to.

I have enough money in the bank to live for the rest of my days. I live simply but well.  I am not saying this arrogantly or pridefully. I am actually quite humbled that I have this privilege. And I want to share how I (we) did it.

My husband and I lived by some simple financial best practices.  We did not inherit money or win the lottery.  We worked, we paid our taxes, we raised kids and did all the things that most North Americans do.  But we always lived by  “the rules”.

Pay off your credit cards as soon as possible

Interest sucks.  A bank or department store owns part of your life and therefore YOU. You pay SO much more for things when you add interest to the price tag. Those gorgeous marked down shoes are not such a great deal if you factor in interest into the price. We did not allow ourselves to have any debt OTHER than our mortgage for years. No car loans, no boat loans no anything loan. If we couldn’t pay cash for it, we didn’t buy it. It wasn’t easy. It took planning and discipline. I didn’t like it very much but it definitely worked.

Most people expect credit card debt to be a fact of life. That is dangerous.

How can you know when you are truly in need of help to get your debt and your finances back on track? There are actually some clear warning signs, which may indicate that you need assistance with your debts. These warning signs can include the following:

  1. Difficulty paying bills on time
  2. Receiving collection calls or past due notices
  3. Living in your overdraft or line of credit
  4. Losing sleep worrying about debts
  5. Spending more than your income allows
  6. Not paying credit cards in full each month
  7. Impulsive spending due to financial worries
  8. Hiding spending or debts from a partner
  9. Allowing bills to stack up because you can’t pay them
  10. A decline by your financial institution to consolidate your debts
  11. No budget or spending plan in place
  12. Feelings of hopelessness that you’ll never get out of debt

This link below is to a free tool that will really help you get a clear picture of your debt situation and allow you to plan your journey to becoming debt free.

This step can be difficult at first when you take a cold hard look at your financials. As a coach I find most clients do not have a clear picture of what they owe and how much things are costing them. Things that seem so alluring are often WAY more expensive than you envisioned.

Here’s how I look at a purchase:

Say you see a cute pair of boots on sale for $100. Cha-ching! Score! Not so fast. In my tax bracket the first thing I do is reprice those boots at 25 percent more because I need to earn $125 to pay for them. Uncle Sam gets the first $25. I bring home $100.

Now let’s say I put the $100 boots plus tax on my department store credit card. In my state (Florida) that means $106 goes on the card.  This card has a lovely 20 percent interest rate. Before you laugh at me make sure you check the interest rates on your cards because that rate is the average nowadays. Now let’s say I am going to pay it off in four months. Reasonable right?


Let’s do the math:

The 20 percent annual interest rate is 1.67 percent per month. That means I will pay approximately 7 percent more for the boots than I thought.  My $100 boots will actually cost me $113.42 with interest factored in and at my personal tax rate I have to earn $141 bucks to pay for them.

You actually can end-up paying 40 percent MORE for those boots than you thought. IN FOUR MONTHS!

The best way to purchase anything is cash or paying off ALL credit cards when they come due.

If you are looking for a great plan to get out of debt, I strongly recommend Dave Ramsey’s Financial Freedom University.  He has a 7 step plan that is rock solid and proven.

My goal in this post was to give you a clearer view of your life.  Debt strangles the joy in your days.  Worry over money is one of the top three reasons for divorce.  Taking responsibility for all aspects of your life is the most empowering and grounding thing you can do.  It’s not easy but it is worth it.

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