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Don’t Just Get Out of Debt Save Out of Debt

Don’t Just Get Out of Debt, Save Out of Debt!

Whether you’re chipping away at a loan payment, are carrying a credit card balance or have overspent your way to anxiety, you’re probably looking for ways to pay down debt ASAP.

You’re not alone. Many people are feeling a sense of fragility in their financial lives, stuck in a cycle they can’t get out of. Did you know that even before COVID-19 hit, consumer debt in the U.S. had been steadily growing? It’s up 19% since 2009, to its current record high of $14.1 trillion!

Also, many people are facing financial uncertainty because of COVID-19—the latest stats show that 22 million Americans are unemployed. And a Bankrate poll released in January 2020 showed that just four in 10 U.S. adults could cover the cost of a $1,000 car repair or hospital stay with savings!

I’m not sharing these figures to scare you, or to bring you down. Instead, I want to use this opportunity to share a fresh approach that I think can help: using a savings plan to help you stay out of debt, not just get out of debt.

I often hear “How can I save if I am in debt?” and “It’s impossible to not have debt.” I made this shift myself, and can offer you some tips to help you increase savings on your path to reducing debt.

3 Steps to Staying Out of Debt

I’ve worked with clients who have paid off debts—often big ones—only to find themselves deeply in debt again when they come to me. What has helped them change the cycle is looking at the deeper emotional links to their money, debt and savings cycles. This can stop the constant up-and-down of debt weight and emotion, which can feel similar to yo-yo dieting.

We all have a relationship with our money, our debt and our savings. We’re going to take a closer look at those relationships. And while we’re doing so, I want to remind you of the power of approaching your financial story with compassionate curiosity, not judgment.

  1. First, I invite you to identify your money mindset.

    Whether your mindset is one of scarcity: “There will never be enough money” or abundance: “There will always be enough money,” it drives your behavior and decisions every day. Your mindset also influences behaviors like whether or not you’ll keep cycling in and out of debt, make promises to yourself that you won’t overspend this time (but do it anyways).  There are online quizzes for identifying your money mindset, and I also find a helpful way can be to journal out some of your top money beliefs.  This can give you some good clues!

    By having a deeper connection to what prompts you to make the financial decisions you do, you’ll begin to tune into your money mindset, and reduce disconnected spending.

  2. Now, what’s your debt mindset?

    I see a lot of “black and white” in how people think about debt. Debt is bad; no debt is good. This rigid thinking can feel a bit like holding your breath.

    When you throw every dollar at your debt and don’t have any savings, eventually you have to gasp for air. You use your credit card or go into overdraft to cover that unexpected expense, or use your credit card as your emergency fund, creating a revolving door of debt.

    Remember, no judgment! I used to be a “balance transfer queen,” shuffling debt around on a regular basis…

  3. Finally, identify your savings mindset.

    What does it feel like to ask yourself “What is your relationship to savings?” You do have a relationship with savings, no matter what your account balance is.

    Some people notice a sense of perfectionism pops up and sounds like “If I don’t have $1000 (or pick your amount) to start with, what is the point? Some may feel so overwhelmed by bills that they can’t imagine taking money from an already-stretched monthly inflow.

    One of the biggest impacts of COVID-19 might be that you are more painfully aware than ever that you didn’t have even a month (or a week!) of funds saved up. You may have been longing to ‘do different’ and aren’t sure why it isn’t happening. And you may feel too embarrassed or ashamed to explore this pattern.

    Financial therapy is a safe place to start the conversation with yourself. And whatever your savings mindset is, I encourage you to try starting with an automatic transfer of even $10 or $20 into savings per month. And notice how this feels, and how it can spark momentum.

    By setting up automatic transfers, you’re also saving yourself from “decision overload,” which can make you feel stuck. It’s one less decision you have to make in your day!

Take a Breath, Then Take the First Step

When you identify your money, debt and savings mindsets, it helps you change the way you approach, organize, and feel about your finances. And this kind of clarity can even improve other areas of your life!

So I encourage you to take a breath before you rush to pay off debt, whether you just got a coronavirus stimulus check or are working full-time. Instead of focusing only on how good it would feel to be out of debt, breathe and consider paying off debt as just a part of your overall money plan, balanced out with savings and spending.

No matter where you’re at in your money journey, I can help. Book your first session with me today.

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I loved Wendy’s energy when I first met her. I knew she was a good fit for me and I felt like her presence would also resonate well with my husband, which it did. We deeply explored the sensitive topic of money and our relationship. Wendy held the space for us to feel the entire spectrum of emotions. My husband and I felt more empathy and, from that place, we were able to have more effective conversations, identify goals, and create strategies for achieving them. We are both grateful for the container Wendy created and support she offered on a challenging journey.
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Wendy helped me look critically at my relationship with money so I could overcome limiting beliefs. She also helped me get more comfortable talking about money because she’s so open about it. I’ve actually had people tell me I’m easy to talk to about project rates and fees—that’s thanks to Wendy!
Ali WeeksOwnerMoxie Writing Co.
Working with Wendy has been one of the best decisions I have made for my career. I was able to dig deep into my money bias and see that I was getting in my own way of success. I always saw myself starting my business a few years down the road, but during the workshop, I took the leap and stopped waiting for the “right” moment. If you’re wanting to grow your business, understand your relationship to money, or just gain more confidence in the mastermind you are – work with Wendy. You won’t regret it!
Sarina PonteOwnerBridgewood Recovery
I’d highly recommend working with Wendy. Her mastermind group was fundamental in helping me build my counseling business. It has helped me get past beliefs about money that were unhelpful and limited my progression.
Kathryn EllwoodOwnerSalt Counselling
Wendy offers a wonderful blend of business knowledge, talk therapy, and financial recovery that can help just about anyone heal their relationship with money. In our work together, I’ve seen her wisdom from such varied life experiences and her true passion for helping clients. Wendy will help you gain clarity and confidence in how you deal with money, all in a way that feels like talking to a friend. Congratulations to Wendy! We’re thrilled to have you as part of the Financial Recovery Institute family.
Karen McCallFounderFinancial Recovery Institute
As soon as I start talking money with Wendy, I can exhale and feel my whole body relax. Her empathic, compassionate lead makes me feel good and confident about my relationship with money and how it shows up in my business. I’m always eager to talk money with Wendy!
Jenn UhenFounderThe Pledgettes
Wendy is one of my most trusted referrals. She is able to work with a wide array of diagnoses and specializes in financial therapy and education, which is a perfect fit for many of my clients. Wendy and I have collaborated on challenging cases, which has only reinforced my confidence in her abilities. She is a talented clinician, highly professional, and an excellent collaborator. She is not afraid of a challenge and rises to the occasion with expertise and grace.
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