The Money Mindset You Need to Pay Your Credit Card Early

How to switch your Money Mindset to pay credit card early and become debt free!

Credit card and high interest can kill your happiness. Use these best mindset tips to pay off your debt and get in the green fast!

To start this story, I want to point out that my financial history was terrible in 2006-2012. With a credit score between the high 500s and low 600s. I was always angry, fearful, and anxious:

• Angry because I had piles of credit card bills that were past due

• Fearful of receiving yet another overdraft letter from the bank

• Anxious from living paycheck to paycheck

Despite the fear, anger, and anxiety, I was really into the yolo (you only live once) movement I didn’t mind partying, shopping and eating at whatever 24-hour diner or taco stand for after the party. And trust me, there was ALWAYS an after part in LA, so I was eating out pretty much every day.

You would think I would be able to say No to three $0.99 tacos from our local taco truck, but I never could. They were totally worth the $3 and the $35 BofA overdraft fee. Gah! It pains me to even talk about it, but the young make mistakes.

Every day I would tell myself, it was a new day, I will be triumphant and stay home…
okay i’ll go out and I wont spend any money…
okay, i’ll go out and I’ll only buy ONE drink…

That NEVER happened.

It took the opportunity to move to a NEW COUNTRY. Literally on the other side of the world - a country where apparently crazy man-sized spiders eat you for breakfasts and koalas have rabies, and watch you while you sleep and gnaw at your toe-nails, to motivate my ass to get my finances back into shape.

Here is how I paid off $20,000 in debt and saved $10,000 to move to reach my dream of moving to Australia.

Table of Contents Show

Taking a Look at Your Current Money Mindset

Goal setting is about uncovering barriers. Before deciding to move abroad, I had made attempts to pay off debts but always failed. The Yolo was strong.

Why did my budgeting attempts fail?

After asking myself a series of questions, I was able to pinpoint the moment and reasons for my financial destruction. 

Over ten years ago, on my way to the bank for work, I was held at gunpoint. At this moment, we were surrounded by people, but these innocent people didn't do anything to help me, this is called bystander effect. 

Thank goodness no one was physically hurt. But it did change the way I thought about myself. Not understanding bystander effect, I believed since no one came to my rescue, I wasn't worth saving. I was worthless. 

If I am worthless, why not have as much fun as I could? I was at least worthy of fun and useless things, right?

My mentality switched and out went any form of responsibility or financial obligation.

"Bartender another round of patrón, please!" 

Flipping the switch

The opportunity to move abroad was my motivation to let go of all that BS I fed myself. In working HARD with a therapist and finding gratitude in every moment of each day, I slowly began to regain my worth and confidence. (FYI, it wasn’t easy, and it took time, meditation, and forgiveness to get to this stage).

Everyone is worthy. Everyone is special. Everyone deserves to be seen and heard. Events in our life are just moments that pass by. Never let these moments take over your choices, or let life happened to you. You are strong, brave and always have a choice in your life.

These were words that I was constantly repeating to myself. If you ever find yourself losing control, feel free to say these words to yourself too.

Now that I had my worth back, I needed to devise a plan.

THE FINANCIAL ACTION PLAN TO SAVE CASH AND MOVE OVERSEAS

Getting real with finances. I joined mint.com and linked every bank account that I had available.

Staying balanced. Every day, multiple times I day, I checked my balances using the app. Mint's accessibility, provided that necessary reality check when I could have caused some severe credit damage. I.e., if I was out shopping with friends, I had the sanity to check my phone and put the clothes back on the rack. 

Find money motivation. The Suze Orman Show was my money motivator. I loved the segment, “Can You Afford It?” Someone would call her and ask if they could buy something expensive. After delving into their financial history and assets, Suze would deny or approve their purchase. 

Kids would call into the segment too. Suze would let them knew if they invested their birthday money they could have a more substantial sum in 25 years. A majority of these kids decided to save, per her advice! If these kids could do it, I sure as hell could too!

Knowing My Spending habits. Mint categorizes all transactions to get an overview of spending. On average, I spent over $1000 a month on night outs, another $750 on restaurants/eating out, and too much on wasted groceries. It was eye-opening to know how much money I lost. 

Making a budget. Using the zero budget method, I revolutionized my spending. Starting with net income, I subtracted all the bills I had over that two week paycheck period. Using Mint, I then deducted average costs for food, gas, toiletries and any other expenses. Once that was complete, I reviewed if there were any extra expenses I could cut like cable, Netflix, and eating out. 

Prioritizing debts. In the past, my debt was high, but I still had a decent amount of money in my savings account. The credit cards had a high-interest rate so; I was losing money monthly. I realized this wasn't the right approach, so I used my savings to pay off the credit cards. 

Once I paid my credit card, I started contributing to my savings again. 

Note: Always keep $1k in savings just for emergencies!

The Lessons I Learned 

Unveiling and dealing with the traumatic experience resulted in massive changes to the way I lived. I realized many lessons that I still live by today.

Avoidance is lonely. Going out, drinking, and buying frivolously only made matters worse. 

Letting go is empowerment. Removing all of the negative feelings about my self-worth and the robbery grew my confidence.

Worth is not defined by what you do or own. Before it was so easy to make a purchase just because I wanted a new jacket. YOLO! But questioning every purchase meant I had to set boundaries between real needs and wants. At first, it was a battle because in my mind everything was a necessity- I was trying to fill a void of being unworthy. However, over time, I saw the value and worth in myself, my time, and money. 

Gratitude is a blessing. Taking a moment to be thankful for everyone, and waking up to live another day altered my need for going out and drinking.

How to Budget to pay off credit card debt

In 10 months, I paid off $20,000 off and saved $10,000 more!

If you think you can't do something you want to do, you are wrong. Figure out what's holding you back from being empowered. Ask the hard questions, deal with any barriers, and make a plan of action. 

What's holding you back from your next big adventure and how will you overcome it? Will you use any of the tools listed here?

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