Stop Segregating Your Income Mentally to Pay Off Credit Card Debt: "Several people close to me, mostly with whom I grew up, are in substantial credit card debt and occasionally ask my thoughts on how to get out of the situation. Although I’m happy to spend time helping them, it almost always turns out to be a pointless exercise because in 90% of the cases, the person isn’t really serious about getting out of credit card debt. Sure, they are miserable about the payments and the thing they wish for more than anything else is that their credit card statements showed a $0 balance. Wishing for something and doing something to proactively possess it are two entirely different things.
A close family member (I’ll call Jason) makes roughly $75,000 per year and has $22,000 in credit card debt. This debt is overwhelming to Jason and he spends at least a few hours every day anxious over the $500+ per month in interest payments it takes just to maintain his current balance. Yet, at least once a month, he finds $150 to go to the casino. When I ask him about it, he says that there are certain things that he won’t give up no matter how bad the debt is.
Jason might never get out of credit card debt with an attitude like that. The extra $1,800 per year that he’s spending at the casino would pay down $9,000 of principal over five years, or nearly 41% of the balance. If he could make an extra $50 per week either by working more hours or cutting costs (yes, this literally means you get on a bicycle instead of driving), he could pay off an extra $13,000 in principal over those same five years. That’s all it would take to obliterate the balance.
Instead, he thinks in terms of “my casino money” or “my grocery money”. No, you have one, giant pile of money that is available to you. If you are in credit card debt, paying massive interest on your balances, take every extra penny you can and pay down the debt."
