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The Only Skill You Need to Get Out of Debt

By David Bakke

eliminate debt quicklyBack when I was in debt, I was hopelessly in debt to the tune of about $30K. And I was unemployed and living with my parents. When the topic comes up in conversation now, the first thing that people ask me is “How did you do it?” For anyone who’s been there, obviously, the answer is complex. For me, it was a lot of things. But, at the end of the day, the question most people ask is: “What is the most important thing you need to do to get out of debt?”

Is it putting yourself on a spending budget, cutting up your credit cards, or getting rid of your cell phone, satellite TV, and other services? What about selling off all your possessions? I‘ve thought about this for a long time, and there is only only skill that you need to get yourself out of debt and stay there. If you can understand what this skill is and hopefully one day master it, I can assure you, your troubles will be over.

That one skill is: Understand the difference between wants and needs with pure objectivity.

Breaking It All Down

You buy things for two reasons—because you want them or because you need them. The key is figuring out the difference between wants and needs in your life.

So if you had to list out you needs, what would they be? I would start off with food, shelter, transportation, electricity, and the list goes on. If you really break down your needs in life—the only thing that you truly need is a roof over your head and food. Do you really need a car? (You could walk to work or use public transportation or carpool). Could you do without electricity? (It would be very uncomfortable, but you theoretically could). You could also apply the same thought process to a lot of things that we consider to be needs in our lives.

OK, this is not where I am going with this article. I am not advocating that you sell your car and turn off your utilities. I am using that as an example of how to distinguish the difference between wants and needs with pure objectivity. Depending upon how badly you want to get out of debt, this can be quite a simple task. I was desperate to get out of debt. So this is what I did. Every single time I got ready to pull out my wallet, no matter what it was for, I asked myself a simple question and answered it with brutal honesty: “Do I really need this?”

For example, I used to stop at a convenience store every day on my way home from work. I’d buy a newspaper, a Coke, a lottery ticket, and from time to time, beer and cigarettes.

On the first day of asking myself “the question,” guess what happened? That entire stop almost disappeared. No more paper (except on Sundays), and definitely no more Cokes or lottery tickets. The beer and cigarettes went away almost entirely too. Hey, I was trying to get out of debt, not become a monk!

Ask Early, Ask Often

And I asked this question every single time. I think it’s one of the things that allowed me to get out of debt at a fairly rapid pace. It wasn’t until I incorporated this question into my everyday life that I fully realized how much unnecessary spending I had in my life

Realize It’s Not Forever

Another important part of this concept is to realize that when you start saying “no” to these things, it does not mean you are giving them up forever. If, on your way out of debt, you give up every simple pleasure you have in life, your journey out of debt would be a short one and I doubt you’d end up where you want to be. You have to tell yourself that these so-called sacrifices are not forever, only until your finances are back in line. Also, it does not mean that you have to eliminate all “wants” from your life. You just have to decide which wants are at the top of the list and truly important to you. And, hopefully, stay away from the more expensive ones.

You just need to tell your conscience “Hey, this is only temporary.” That way, your mind will think to itself that at some point in time you can go back to buying the newspapers and Cokes and lottery tickets. But I do have a little surprise for you and I’ll leave you with this thought. Regarding the things that I quit buying because I realized they were unnecessary, most I never went back to buying even after I was able to do so.

It was quite a cool place to reach in my life regarding my money, and since mastering this concept and applying it to my life, I have never looked back financially.

(photo credit: meddygarnet)

David Bakke
David started his own personal finance blog, YourFinances101, in June of 2009 and published his first book on ways to save more and spend less called "Don't Be A Mule..." Since then he has been a regular contributor for Money Crashers. He lives just outside Atlanta, GA and most all of his free time is taken up by his amazing three year old son, Nicholas.

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  • http://www.budgetpulse.com Craig

    Knowing what your income is versus your expenses is huge. Just don’t spend more than you make.

    • david


      You’re aboslutely right, however, by limiting yourself to only this concept, you may lose out on opportunities to impact your spending.

      Thanks for commenting

  • http://knsfinancial.com Khaleef @ KNS Financial

    Good article! We need to have enough discipline to evaluate every penny that we spend, and to distinguish our needs from our wants.

    • david


      You’ve crystallized my thoughts perfectly!

      Thanks for weighing in

  • http://www.ramonaiftode.com Ramona

    I used to spend A LOT until last year. We’d order takeouts, I’d buy all kinds of useless junk. Till the “faucet” stopped working. After having to move onto working on myself as a freelancer and just trying to pay my debt for the first 2 months, no money for leisure, just the bills, I realized how important is to keep from spending like crazy. My bills are now SMALLER, I do make more money and spend way less.

  • David


    Converting to life as a freelancer probably had quite a sobering effect on your spending.

    I am in the same transition at the moment, and it really opens your eyes to what is necessary and unnecessary.

    Thanks for weighing in!

  • WeAreNotGod

    For once I’d really appreciate how someone shares ideas on how they removed real debt; $10K or ever $30-$50K is not debt…how about $500K

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