I know what you're thinking: there are plenty of four letter words that I could be referring to! But that one that I am referring to is one that is generally misunderstood, misused, stress-causing and freedom limiting, it's....
Don't get me wrong there is such a thing as "Good Debt" and "Bad Debt" and we will come to that later. What this post is about is "Bad Debt": the debt that prevents us from living the life we love.
Adam Barker is a man with a great message. I stumbled across his TED Talk recently titled "Sell Your Crap. Pay Your debt. Do what you Love" and found myself agreeing with him wholeheartedly.
In fact, my husband and I did exactly what Adam and his wife did: three years ago, we sold all our possessions, bought a caravan and spent one and a half years travelling around the East Coast of Australia. And it was magic.
But the reason I love Adam's talk is not because his message is that we all need to sell up and travel around the world. That's not his point. His point can be summed up in what I think are these five very simple messages:
1. Get rid of what you don’t need.
2. Free up your space and your mental energy and then use the money you earn selling excess crap to move your financial and lifestyle goals forward.
3. Stop playing the "next best thing" game, looking around your home to see what item you can upgrade next.
4. Stop spending today's money paying off past purchases.
5. Build an emergency fund to cover future expenses.
And by doing these steps you give yourself the flexibility to do awesome things.
Sounds simple enough right? Well believe it or not, it actually is. Once you free yourself of debt you free yourself of limits and give yourself freedom and flexibility.
If you aren't sure whether you have good debt or bad debt, or if you feel that there isn't any light at the end of the debt tunnel then my one piece of advice is to ask for help. Don't be afraid. There are plenty of people out there, like me, who can help you work a way forward and create a path to being free of debt and on the way to living the life you love.
P.S Whilst "good debt" can be a very useful financial strategy. Until you can manage debt, period, it's probably not a good strategy for you.