Paying off Debt: from Zero to Hero in One Blog Post

The 12 Steps to Fixing Your Financial Life

Mr. Money Mustache says:

Your attitude determines your lifetime wealth much more than your knowledge of financial nuts and bolts.


I’m blatantly stealing part of this post title from Mr. Money Mustache, my unofficial personal finance/badassity mentor. In a recent post he writes what is probably one of the best paragraphs on the interwebs relating to personal finance. He says:

Here’s how to cut your life costs in half. Start by getting rid of your Debt Emergency if you have one. Live close to work. Move to another city if you enjoy adventure. Don’t borrow money for cars, and don’t buy stupid ones. Ride a bike wherever you can. Cancel your TV service. Stop wasting money on groceries. Give your kids the opportunity to achieve greatness without being pampered. Lose the overpriced cell phones. Learn to appreciate the life-boosting joy of using your own body to get things done. Learn to mock convenience. Practice optimism.

13 sentences, one overarching message: take control of your own financial well-being. This little paragraph is the best road map to getting on the path to financial freedom. It eschews the bullshit and minutiae to get straight to the point. Don’t let your debt control you. Don’t let keeping up with the Joneses control you. Don’t let your paycheck or your bills control you. You should be the one in control.

I have either directly been following this advice or found it on my own through common sense. I love that it is now all put together into one concise paragraph with links to further details. If you really want to find out how to improve your finances then take each sentence, put it into a list and work towards achieving each step.

Thanks to MMM we now have this 12 step process that will tell you how to cut the frivolous spending in your life and get on the path to financial freedom. And guess what? It actually works. I am living proof.

Here is how I have done it:

1. Start by getting rid of your Debt Emergency if you have one.

This is the whole reason that this blog began. I realized that I was in a Debt Emergency thanks to MMM’s post and I decided to do something about it. In just a few short weeks I have paid off close to $8,000 in debt and I am well on my way to paying down over $100k of debt in four years.

I went 15 months just paying the minimum payments on my loans and getting nowhere fast. After my punch in the face I decided that I could change and so I did. It took some effort but not much time and I am now better off for it.

If you only take one lesson away from this post it should be this single point: Get yourself out of debt and everything else will follow. In fact, each of the next 11 steps will help you in achieving this first step. I am able to accelerate my debt payoff thanks to changing these other aspects of my life. 

2. Live close to work.

This is one of those things that I did way before I ever knew that MMM existed. Back when I moved to a new city for my post college career I opted for an in city apartment only a mile walk from work. It is one of the best decisions I have ever made.

I walk to work every day and my transportation costs are close to zero. The downside is that my rent is a little more expensive but so far it has been well worth it. There is so much more upside. I live in a vibrant neighborhood with so much to offer.

Did I mention that I walk to work? No traffic, no buses, no interstates. Just a sidewalk and the cool morning breeze on my face.

3. Move to another city if you enjoy adventure.

I am a huge proponent of seeking adventure in new cities. When I was 18 I left the comforts of home and moved to a new state for school. I did not know a single person on campus when I first arrived. Three years later I moved to Europe for a semester where I had some of my fondest memories.

Eventually I graduated and decided to leave my college town behind and move to a new city for work. MMM suggests engineering your move around what will most benefit your finances while also being a great place to live. This is exactly the method I took.

While I live in the 31st most expensive city in the U.S. this is where the jobs are, and they pay really well. It is also, in my biased opinion, one of the greatest regions of North America. I live in the beautiful, emerald city called Seattle.

Moving and discovering new cities is simply wonderful. By being flexible and mobile you will open yourself up to career advancement opportunities, education opportunities, and financial opportunities. I won’t be in Seattle forever and will one day set out to discover another city but until then I have been enjoying this North West adventure.

4. Don’t borrow money for cars, and don’t buy stupid ones.

When I moved to a new city and rented an apartment close to work I sold my car. This by far has had the most positive impact on my financial situation. I even did it before I started on this debt pay down marathon and it really wasn’t that hard.

Whenever I need a car I just pay by the hour using ZipCar. There is one conveniently  located a block from my apartment. For daily transportation I walk. I walk to work. I walk to the grocery store. I walk to the bars and restaurants. When I need to go farther I take the bus or train. Occasionally I fly.

My transportation costs are a fraction of the average American. I cut my transportation costs from around $250 each month to tens of dollars. I also never have to spend stressful hours sitting in traffic wasting away my time. It will be a long time before I own a car again.

5. Ride a bike wherever you can.

I own a bike but I hardly ever use it. I walk almost everywhere and I am scared to death of crazy Washington drivers that will run over bikers and not even blink. In the summer I do get more use out of the bike as a leisure and exercise activity.

Essentially my walking shoes are my bike.

6. Cancel your TV service.

After paying over $1,000 for cable in 2012 I finally cut the cord in January of this year. Honestly I have not missed cable for one minute. I still get the local channels and there is a Red Box  two blocks from my apartment if I ever feel like grabbing a movie.

The $1,000 I will save this year is helping me pay down my student loans. Beyond the financial savings I now have more time for other things, like reading books, cooking, and exercise. One of the quickest ways to start improving your life is to turn off the television.

7. Stop wasting money on groceries.

In the past two months I have cut my grocery bill by more than half of what it was in 2012. I used to easily spend $250 – $300 each month on food. I cut my food costs down by drastically changing my eating habits.

I used to eat a lot of frozen pizzas and lasagna. I used to go to 7-Eleven every Sunday morning and buy junk food. I used to eat meat two or three times a day. I used to drink a couple of 6-packs of craft beers each week and buy ten dollar steaks on the weekends.

Well I have changed all of those bad habits which has resulted in an improved balance sheet and, more importantly, better physical health.

Instead of frozen pizzas I now eat rice, beans and a lot more vegetables. I completely cut out the chocolate milk, chips, ice cream, and burritos that I would buy each week at 7-eleven. I no longer eat meat every day and instead of a $10 rib eye I buy cheaper cuts of beef or pork. And rather than sitting on my ass, watching TV, drinking carb-laden beers I might have one glass of whiskey while reading a good book.

This one step has led me to save over $150 bucks each month. Perhaps even better than the financial gain, I have lost weight and am leading a healthier lifestyle. This illustrates how improving your financial life can also improve your physical well-being.

8. Give your kids the opportunity to achieve greatness without being pampered.

Not applicable to me. I don’t have kids.

9. Lose the overpriced cell phones.

This is great advice. My solution was to stay on a family plan with my parents. I only pay $40 per month and get unlimited data, talk, and texting. I am also on pretty much the best network in the country and I rarely find myself without service.

The big bonus is that I use my phone as my internet provider. It is just as fast if not faster than when I had Comcast and yet costs much less.

The other way to keep cell phone costs down is to not upgrade your phone every year or two. My phone is two years old right now and still works like a charm. For $20 bucks I replaced the battery and with another $10 I replaced the screen protector and case. The phone is like new again and I didn’t have to spend $200 on the latest tech. 

10. Learn to appreciate the life-boosting joy of using your own body to get things done.

I have built my life around avoiding maintenance work as much as possible. I never have to change the oil in my car, or wash it, or fix a flat tire. ZipCar does all of that for me.

I never have to replace the flapper in my toilet, water the flowers at my apartment, or fix a broken door handle. My landlord does all of that for me.

However, I have taken MMM’s sage advice and avoid using motors to get things done as much as possible. I use the muscles in my legs to transport myself to work every morning. Instead of paying ten bucks for a cab to take me a mile home on a late Saturday night I walk my own ass home from the bars. Instead of renting a car to carry my groceries home from the store I stuff them in a bag and use my perfectly able arms to do the work.

Sure these steps may take longer but they are life-boosting! Every time you learn to do something for yourself whether it be walking home, mowing the grass, or replacing an engine in an old car, you level up in life. You will never un-learn that task and you can benefit from that knowledge for the rest of your life.

11. Learn to mock convenience.

I want to re-name step eleven to: Don’t Be a Lazy Ass. I used to be a huge lazy ass and would pay for trivial conveniences in my life. It is actually quite embarrassing but I will share some of them with you.

When I first started my job I thought a mile was too far to walk to work. So I paid four or five bucks a day to ride the bus. It wasn’t particularly quicker but I was too lazy to use my legs to get me to work (see step ten). Luckily this only lasted a few weeks before I wised up.

I used to buy Coffee from Starbucks almost every morning. There is one in my building and before I hit the elevator to go up to my desk I would stop and buy myself a $2 cup-o-joe. The worst part about this is that my office has free Starbucks coffee brewed and waiting in the lunch room every morning! How could I be such a lazy-ass that I would rather wait in line to pay for coffee rather than walk to the other side of my office and pour a cup of the same coffee for free? I was such a moron.

One more. I used to be so lazy that I paid for internet service from Comcast (~$40 per month) when I had a perfectly capable phone. I thought it took too much effort to plug my phone in and turn on an app instead of paying $40 bucks each month to have the web in my apartment. That right there is the definition of a first world lazy ass.

12. Practice optimism.

Before MMM I thought I was a pretty optimistic guy and now I am convinced that I am more optimistic than most. However we need to add two words to step twelve. It should read: Practice Optimism. Be Happy.

While I am a practicing optimist that didn’t always translate into happiness. MMM tells us that his optimism led him to be generally happy every day. For me optimism revolved around me looking into the future. When in high school I was confident and optimistic that I would get into a good university. When graduating college and looking for work I was confident I would find a well paying job in my field. I was so optimistic that I turned down four job offers before I took the job I wanted.

So, I am optimistic about my future and confident that things will work out. However, once I achieved my goals instead of finding happiness I shifted my focus to my next goals. I never took the time to appreciate the things I have accomplished and be thankful for all that I have.

Being happy goes hand in hand with practicing optimism. Some people have to put more effort into it than others. I won’t speak for you but I know that I lead a very privileged life with more opportunity and freedom than most people on this planet today. I need to remember that fact and stop to reflect on it more often.

If you made it through all of that then congratulations. Thanks to MMM, you now know the steps you need to take to turn your life around and, hopefully, I am proving that it can be done. Just remember, this isn’t a check list. You can’t check each item off, be done with the list, and hope to have a vastly better life.

Most of these steps are things you should practice on a regular basis. They take effort to continually accomplish yet soon enough they will become a regular part of your life. Soon you will think the other way to live is just as crazy as these twelve steps may seem now.

Now go become a hero.

Photo Credit.

  1. Sweta said:

    Great post, probably the best one you’ve written so far but that could be because I’m such a MMM fan.

    • Thanks, all the credit is due to MMM. Thanks to his eloquence I was able to get started.

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