Most people have to address debt at some point on their financial freedom journey. You might have student loans from medical school. You also might have consumer debt, a car loan, or a mortgage. So what do you do with debt? Today, we are going to explore what debt really is and the three strategies that you can use to address your debt. Remember, that we are going to keep building wealth and upleveling our finances at the forefront of our journey. Let’s get started.
First of all, you need to understand what debt actually is. In our society, debt is almost universally discussed as a negative. We have made it mean something bad. However, you must remember that is a story we’ve accepted, not the actual “what happened”. So what is debt? People go into debt when they either can’t afford to pay for something in full right away or choose not to. Debt means you are buying money and the price of that money is the interest you have to pay. Remember that money has no morals. What you make your debt mean is up to you.
For most women physicians, debt is something to be addressed. Almost all of us incur some kind of debt, usually as a result of medical school. There are three ways that you can deal with debt. You can pay it off quickly by putting anything extra toward your debt. You can go halfsies, meaning you put half of your extra income toward your debt and the other half toward saving and investing. The last option is to simply pay the minimum on your debt, freeing up your extra income to grow assets.
In this episode, we also explore:
- The difference between high and low interest debt
- Questions you can use to process your thoughts and feelings about debt
- Alternative stories that we can tell ourselves about debt
- Why the “right” decision is actually the decision that feels right to you
Featured on the episode:
- Get a refresher on how money has no morals from episode 11 here.
- Dig deeper into the concept of early debt payoff in this blog post.
Learn more about how to manage your mindset with Wealthy Mom MD.