Simple Process For Getting Out of Debt

Spend Less Than You Earn – Simple Process For Getting Out of Debt

For most of my life, I was living a paycheck to paycheck. I was convinced that one day I will become super rich. That’s why I never bothered to save money aside. I didn’t know how exactly how I was going to achieve this financial freedom but something was telling me that I was going to do it regardless of the circumstances. I do not know whether it was for good or bad, but becoming a millionaire in my 20 didn’t happen. Probably it was a good thing because I learned how to take care of my personal finances on my own without having to subscribe to some bizarre online training.

I see so many people spending like crazy and never thinking about the negative outcomes that I feel obligated to write a piece of content that will hopefully help more people manage their finances better.

In this post, I’ll outline a simple process which I use to manage my personal finances. A strategy, or more like steps I follow that are helping me control my income so I don’t have to sell my organs in order to have something to put on my table to eat. Hopefully, the information inside this post will help you acquire financial freedom in the following months.

My Short Story

It’s not a story about my life, it’s a short story about what was my previous relationship with money.

I grew up in an average income household. My parents earned an average wage during their whole lives – and they still do – which means that we never went on fancy vacations nor I had cool clothes, as most of the kids in my block.

When I turned 16, I started working. The job was hard but now I had money at my disposal. I felt powerful. Although they paid me much less than what they had to pay me, I was feeling rich. Now I had enough money to buy the clothes I always wanted and go out with my friends more frequently.

I spend my first paycheck to buy new clothes and a couple of drinks at the local disco.1

My bank account was constantly close to zero probably till my 25th birthday. I did not have a car nor a place to live. I was still living with my parents till that age. My most valuable possession was my wardrobe. It was full of clothes.

The reason I didn’t have any savings in my bank account was my constant desire to live life at fullest. I was going out 3 out of 7 days each week and I was spending all of my money on clubs. I thought that something magical will happen which will make me ultra rich. Of course, this didn’t happen. Well, it did, but it was a result of a new way of living, and most importantly, it happened after acquiring a new mindset.

Why Do People Get in So Much Dept?

Why Do People get in So Much Dept

In the world full of gadgets and new things constantly shipped, it seems like we’re never complete. There’s always this new thing we must own to become flawless.

And our desire to be unique and feel good prevails over the numbers inside our bank account 9 out of 10 times. Even if we don’t have enough cash at the moment, after a brief discussion with our inner self, we decide that we deserve this new dress or this new watch, or whatever, and we pull out our shiny credit card. The card we initially told ourselves that we’re going to use only for emergency situations. “But this is kind of emergency, I have nothing to wear” – you might say and at this moment, you slide the card and you’re already few bucks behind budget for this month. Repeat this routine a couple of times each month and you’re inside a vicious circle. A loop that’s extremely hard to get out from.

The number one reason people get in so much dept so early in their lives is their inability to postpone gratification.2

Our current world is a place where everything is happening so fast that our mind can’t really understand why we can’t have what we want, now, at this very moment. Nowadays you can buy what you want with one single click and get it delivered to your door sometimes in less than 24 hours. The buying process is so stripped that we often buy things on autopilot and once we know it, we’re already maxing out our credit card limit.

We’re currently choosing between more than 100 brands even for a simple thing like “What cereal to buy?” Since the choices are so many, our desires increase. Something logical actually. It’s hard to have only one watch since there are so many cool watches available for you to purchase. This normally leads to more impulsive purchases and more use of our credit cards. But there is more…

Main Reasons We Can Control Our Spendings

Besides the inability to postpone gratification, there are other reasons that are stopping you from being debt free:

  • You’re a fashion addict: If you’re not a fashion blogger and you don’t earn your paycheck by owning and wearing different clothes every day, you don’t have a good reason to spend money you don’t have for constantly upgrading your wardrobe. You see, most of the people don’t even notice if you wear something new. Why bother dressing with the latest fashion trends?
  • You’re a lifestyle junkie: What most people do when they get a salary increase? They buy a new car. Do they really need it? I don’t think so. The type of people who’re constantly shopping and updating their Instagram with new gadgets are people who have issues. They’re using shopping to suppressed their problems. Unfortunately, this usually backfires and it ain’t pretty.
  • Your Ego: When we have nice things and we earn a decent amount of money we start thinking that we’re special. Our ego is off the roof and since we can’t show people the number of zeros in our bank account, we express this by doing the above two things: We constantly upgrade our lifestyle and we dress by the latest fashion trends. At some point, we start taking credit to keep up with our I’m-fucking-rich-and-you-are-not kind of lifestyle. Then the trap snaps.

Why we do all these things even though that we know that they have bad consequences? Well, read below:

We’re Brainwashed

On top of the hard decisions, I think that we’re getting brainwashed by social media and the commercials we see on tv:

  • Why Social media? Because inside these mediums people share only the positive side of life: New car; New home; New trousers; A pair of new sunglasses. By seeing these statuses we grow a nasty habit of always wanting more. Always wanting to be dressed in the latest fashion trends. Always wanting to go on vacation.
  • Why commercials? Because we see them constantly. A famous marketing strategy is to show a commercial as frequently as possible so that people start desiring this new thing. At one point you’re like: “Ok, let’s buy this innovative dishwashing gel that will supposedly protect my dishes from breaking even if I dropped them from one meter.”

We’re surrounded by messages that are saying that we deserve the abundance around us. It’s easy to buy a new pair of headphones and put them on your credit card. Because, you can have them now, and you can worry about the payment later.It’s easy to go on vacation on an exotic place TODAY, and worry about what you’re going to eat next week.

It’s hard to do the opposite, though: To save money for months, don’t spend money on luxuries, don’t update your Instagram profile for months and then go on vacation. It’s hard because it takes time and discipline.

The Secret of Becoming Financially Independent

The secret of getting out of debt is actually something really logical. Something you need to shout, not only read. It’s: Spend less than you earn.

This simple formula changed my life and helped me stay away from credit cards. I managed to afford my own home before I turn 30. In less than 5 years I saved enough to cover more than 30% of the expenses for my apartment. Yes, I did get a loan from the bank but in the next few years, hopefully, I will be able to repay the remaining sum.

If you earn 2000 a month, regardless of the currency, you need to spend less than 2000 each month to live without having to take credit from the bank. Simple mathematics. We all know that but it’s hard for us to resist the modern temptations.

But there are consequences. Here are few of the things that will happen if you frequently spend more than you earn:

  1. You start getting more loans.
  2. It’s hard to keep up with the payments.
  3. You start worrying.
  4. This has a negative effect on your marriage and on your relationships with other people.
  5. Eventually, you might lose your home and your spouse.
  6. You die.

Ok, it’s a bit extream but that’s the point. I want to scare you. I want to slap you in the face so that you can wake up and gain control of your life and your personal finances.

Being debt free is one of the rewards of adopting a minimalist lifestyle. Naturally, you will have more money if you only buy the essentials. Of course, it’s not а necessity for having zero debt. You can be a non-minimalist and still learn how to control your finances. Either way, it’s hard.

Spending less than you earn is easier said than done in real life. Fortunately, there are good books on the subject. Books I will totally recommend reading:

Books and Blogs That Helped Me Become Financially Independent

Before I finally share the process of getting out of debt, I would like to share a few books (and blogs) that will help you realize what are your flaws in your budgeting:

Personal finance books to read:

  • Rich Dad Poor Dad by Robert T. Kiyosaki: The first book I read about personal finance. An international bestseller for a reason. It’s a relatively short book and it will teach you basically everything you need to know.
  • The monk that sold his Ferrari: A book by Robin Sharma. The book will tell you a story about a guy who gives up on abundance and finds peace in living a life with less. A story about why you don’t need much to be happy.
  • Think and grow rich by Napoleon Hill: A book you should definitely read. It will inspire you and it will show you ways of becoming a way better version of yourself by only using your brain.

Personal finance blogs to follow:

  • The personal blog of Ramit Sethi. He’s quite famous and there’s a good reason for that.
  • He shares techniques and strategies that will help you retire at 30. Or even before that.
  • I follow Pat Flynn since I was 24, probably. If you’re looking for a way to build a passive income stream, this is the guy to go to.

The Process For Getting Out of Debt

Finally, let’s see what are the steps that will help you become financially independent:

1. Understand That It Will Take Longer Than You Think

Getting out of debt and in control of your finances is boring. You need to know this fact right from the start. You don’t purchase new things. You don’t go to a lot of fancy vacations. You don’t wear designer clothes or such that are from the latest collection of your favorite brand.

The first step will be to learn to reward yourself only when you saved enough money. For example: You want to buy a new vacuum cleaner because the one you have now is not cleaning properly? Ok, but don’t rush to the store right away. Set a budget first. Let say that you’re willing to spend 300 dollars on a new vacuum cleaner. Each month set aside 100 bucks and once you have the needed sum, then go to the store and buy the new piece of equipment.

2. Be Ignorant Of What Others Do And Have

My best friend just purchased a new car? I no longer care.

The number one reason people spend a lot of money regularly is because they want to be ahead of the pack. Ahead of the social media game where the person with most likes and the largest amount of followers is the winner. How often you start to want something after you had a conversation with a close friend? Too often I believe. After a friend tell us that he/she just purchased a new car we immediately want a new car. Even if your current vehicle is running smoothly. When someone describes his vacation in the Caribbean we want to go there as well. Even if we just found out about this island.

When people brag about their cool stuff, smile. If it’s becoming unbearable, you might wanna excuse yourself and do something more meaningful.

3. Make Sacrifices

If you’re in debt you need to cut some expenses. Depending on your lifestyle these things might be: Stop going out to a fancy restaurant like you’re the president; Stop buying expensive groceries; Stop wearing different clothes every day like you’re Lady Gaga; Stop paying for extremely, super, giga fast internet connection or other services you don’t really need. You probably don’t even need cable television. Or a TV at all.

4. Understand That Being Dept Free Is Way Better Than Being Cool

Previously I owned more than 20 shirts and my mission was to buy at least 31 shirts so that I can wear a different shirt every day of the month. Yes, I was that obsessed. Now I primarily wear black t-shirts and my relationship with fashion changed. Thanks to minimalism, I now know what are the benefits of having a capsule wardrobe.

You can be a cool person with 10% of the clothes you own right now.

5. Set Some Kind of Budget

A lot of online gurus will tell you that you need to pay yourself first, which means that you need to set aside a specific amount of money each month before you start spending on groceries and bills. Once the previous is done you can start spending. Even though this is 100% correct, it’s often something you can’t follow strictly. We’re all humans and life is too often hard to predict.

Set a spending budget but don’t be too hard on yourself when you need to get something you actually need. For example, a new tire because you had a flat one.

6. Actually Save Some Money

Save some money each month. The amount is not so important. Sometimes you can save 10 bucks, others a thousand, it doesn’t matter. The idea is to create a habit. To convince your mind that you need to save money each month.

7. Get in Control

As I mentioned earlier, a lot of times we buy things on autopilot. Amazon and other large online stores are daily optimizing their buying process with the intention to make it as easy as possible for people to click Buy.

Prevent yourself from making impulse purchases. You can do so by deleting your credit card from all online stores which you’re regularly using. This simple action can save you thousands of dollars a year.

8. Stop Buying Shit

Lastly, I want to tell you to prevent yourself, as much as possible, from buying useless things. Unsubscribe from sites like H&M. Sites that send you emails about when the new sale will begin. Stop using social media so often. These sites will only tell you to buy. Buy, buy, buy. Things you don’t actually need.

Some Closing Thoughts

Getting out of debt is easy. The hard part is to be consistent in your actions.

The main reason people get into so much debt is their inability to control their actions. Their inability to be happy with what they currently have. Because if you’re happy with your life and you’re at peace with your inner self, you won’t need to constantly upgrade your wardrobe or your gear.

Don’t look for quick wins when it comes down to personal finances. Don’t spend your last dollar to buy a lottery ticket, hoping that you will win millions. The universe doesn’t work like that. Happiness and joy come from a clear mind and hard work. Instead, ask yourself this: “Why you’re not satisfied with what you have?”

Probably there is another reason besides your nasty spending habits to have a negative bank balance. A reason not visible on the outside but deeply buried inside. Find out that reason and you will finally see your bank account flourishing.


  1. Yes, the teenagers in my country start drinking way before they turn 16. What I can tell you, we find our ways. Not that it’s a good thing.
  2. People who learn to delay gratification are usually people who are much wiser when it comes down to financial decisions. Also, they enjoy life much more. Probably it’s already late for us, but you can apply the following test to your kid: Stanford marshmallow experiment.

Your email address will not be published. Required fields are marked *

Enjoying this?
Get more high-quality content by signing up for my weekly newsletter. No BS, no ads, only helpful content like this.