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Debt sucks.

But you already know that, don’t you?

Maybe you’re buried in debt and struggling just to keep the bill collectors at bay. Perhaps you’re making a good salary but still feel like you’re living paycheck to paycheck, unable to save any of the money you have coming in. Or, maybe you’re tired of schlepping away at your job and dream of doing more – if only your debt obligations weren’t keeping you stuck without any options.

Once you discover how debt is destroying the power of your paycheck and commit to eliminating its burden, you’ll be able to live life on your own terms and explore options you never knew existed. You’ll be able to harness the power of your paycheck to fund your savings goals and spend your money on the things you really want.

Pretty cool right?

We think so.

What’s Wrong With Debt?

So, what’s wrong with debt anyway? Being in debt is normal, right? Isn’t it just a fact of life?

It doesn’t have to be.

Yes, debt seems normal in America… almost inevitable. After all, as of 2015, the average indebted American household owes almost $16,000 in credit card debt, over $27,000 in auto loans, and over $48,000 in student loans. And that doesn’t even touch mortgage debt! According to the numbers, Americans fork over an average of nearly $6,700 a year in interest payments alone! That’s a whopping 9% of the average household income.

That means we’re putting more of our income toward interest each year than toward our own retirement savings! When you really think about it, that’s absurd. With those figures, it’s no wonder so many Americans struggle to make financial progress1.

While being in debt may seem “normal,” we barely comprehend what debt actually means for our lives. We’re so used to it hanging around our necks, we’ve grown numb to its effects. We don’t have the foggiest idea what it’s costing us.

At least, my husband and I sure didn’t… until we finally dug into our debt.

Our Battle with Debt

TRUTH #1:

Debt is the single biggest obstacle standing between you and the life of your dreams.

How do we know? Because we lived it.

For years, we muddled through a normal debt-filled existence. We had a house (with a mortgage), two cars (with car payments), and regular jobs (with student loans). To top it off, our spending was out of control.

Like most people, we never really noticed our debt. We were making a nice living, but we couldn’t seem to save a thing… nor did we really care. At the end of the month, we paid our bills but never stuck a dime into our savings accounts.

We had gotten comfortable with our debt. Paying it off was just another part of everyday life. It was there and we knew it, but we didn’t grasp what it was costing us.

About that time, going to work became a chore. Jobs we once enjoyed were suddenly becoming more and more of a drag. And, why wouldn’t they? We weren’t working so we could live the lives we wanted. Instead, we were working simply to pay back our debt.

We had to make a change. Our time in the funeral industry taught us that life is precious. We were giving up our precious time – our lives – to earn money that belonged to our debts, not to us. In essence, we weren’t just wasting our money; we were wasting our lives.

So, we pored over our bills, totaled up our debts, and examined our spending habits. We recognized we had a problem. After adding it all up, our total debt (minus the house) was came in around $50,000. We made the immediate decision to pay it off and never go into debt ever again.

Over a period of 18 months, we cut back on our spending, used the extra money to aggressively pay down our debts, and ended up destroying every debt we owed but our mortgage.

Finally, we could breathe a small sigh of relief. Our debt was gone, and we felt like we’d hit the lottery. Instead of shelling out thousands of dollars a month toward our debt, we were able to save that money and do with it whatever we pleased.

The Power of Your Paycheck

Want to know the biggest key to getting out of debt and building wealth? Chances are, you have everything you need – you simply don’t know it yet. That’s right: Your most powerful wealth building tool is your own paycheck.

It seems obvious, right? But it’s absolutely true. The key to growing wealth is earning money. And for the vast majority of us, that means earning a paycheck.

TRUTH #2:

Your paycheck is your most powerful wealth building tool.

Unfortunately, too many of us are quick to dismiss how powerful our paycheck actually is. We think we don’t earn enough, and we convince ourselves that we need to earn more money if we ever hope to get ahead. But the vast majority of the time, nothing could be farther from the truth.

In reality, we simply haven’t figured out how to harness our paycheck’s power…yet. Instead of using our income in service of our own true goals, we buy things we don’t need or even want. Worse, we finance these purchases with money we don’t have, undermining the power of our paycheck by shackling it to the service of those debts. Here’s another truth that took us a while to grasp:

TRUTH #3: Debt is the enemy of income.

Racking up consumer debt is the fastest way to destroy your income and the ability to build wealth that comes with it. But it’s not just the debt itself that hurts. It’s the fact that you don’t realize how much your debt is really costing you.

When you use debt to finance a purchase, the true cost of what you’re buying never sinks in. You put off the pain of purchasing until later. And, when you do it over and over and over again – financing everything from cars to education to furniture – all those monthly payments add up and chip away at your ability to save. Chip, chip, chip. Month after month after month. After a while, instead of working to live, you’re working just to pay back debt.

“Racking up consumer debt is the fastest way to destroy your income and the ability to build wealth that comes with it. But it’s not just the debt itself that hurts. It’s the fact that you don’t realize how much your debt is really costing you.”

There’s nothing fun about schlepping away 40 hours a week so you can turn around and hand over your money to somebody else. But, when that money is yours to keep, everything becomes a lotmore exciting.

Instead of getting your paycheck and thinking about all the things you need to pay with it, you start dreaming about all the things you can do with the money. Rather than thinking, “Well, this needs to go toward the car payment,” your thoughts change to, “I’m going to use this money for a trip to Mexico.” You stop seeing life as a series of “must-dos” and start looking at all the possibilities life presents.

It’s an incredibly freeing feeling, and it’s one you can experience by following the ideas in this book.

By protecting your paycheck, you protect your life.

Using the Golden Rule to Build Real Wealth

Perhaps you’ve heard this one before. It’s called the “Golden Rule”…but it might not be the rule you’re thinking about. Here’s how it goes:

TRUTH #4: He who has the gold makes the rules.

Growing up in your parents’ house meant you had to follow their rules. Since your employer controls your paycheck, you have to play by their rules. When you owe money to a lender, you guessed it, the lender makes the rules.

Think about this for a minute: Right now, you’re trading your time – your life – to make money. But, when you’re in debt, part of every paycheck you bring home literally belongs to somebody else. Every. Single. Month. That means you’re giving up part of your life to somebody else. You’re not just trading your life for money, you’re trading your life for debt. You owe, so you give up control.

That’s not all. Borrowing money isn’t free. Lenders don’t just loan you money out of the kindness of their hearts. You’re not just using your life to pay back the sticker price of those items you financed – you’re using it to pay interest, too. Debt costs you more and more, often without you even realizing it, killing you softly with each monthly payment.

When you’re debt-free, you get to choose how you spend your paycheck. You have the ability to take risks and live life on your own terms. You are in control of your money and your life.

Get out of debt. Make your own rules. Become “the man with the gold.”

9 Specific Reasons Debt Sucks

Greg and I have grown to hate debt so much that we could list thousands of reasons you should avoid it like the plague.

Here are some of the most important.

•Debt is the enemy of income. Your paycheck is the most important wealth building tool you have. When you’re forced to pay off debt each month, part of your income – sometimes even most of it – is already spoken for. Debt hacks your paycheck to pieces, and with it your ability to build wealth.

•Debt makes it hard to get ahead. Debt effectively decreases your income, making it that much harder to make financial progress. When you’re shelling out thousands of dollars to creditors each month, it’s pretty freakin’ tough to look past tomorrow’s bills. And when you’re living paycheck to paycheck, things like saving for retirement, college, or even a vacation get put on the back burner.

•Debt decreases your options. When you have bills to pay and mouths to feed, big financial risks – like quitting your job to start your dream business – don’t look too attractive. And the more bills you have, the less likely you’ll be able to take some risks in life. Debt forces you to become a wage slave and destroys your ability to make decisions for yourself. This voluntary purge of your freedom comes at a cost – mentally, emotionally, and monetarily.

•Debt stresses you out. Being in debt is downright stressful, especially when you fall behind. Is it any wonder that so many of us walk around depressed, stressed, and angry? Even if you don’t have debt collectors harassing you, all that debt hanging around your neck is enough to make you want to crawl into a hole and hide.

•Debt makes you give up control. He who has the gold makes the rules. When you owe somebody else, you have to play by their rules. They are in control, not you.

•Debt forces you to work longer and harder. Got a giant car payment to worry about? How about a mortgage to pay? When you’re in debt, you have to keep feeding the beast – and you’re paying more than the sticker price in the form of interest. That means working harder and longer just so you can turn around and give your money to somebody else. Doesn’t sound like much fun, does it?

•Debt hides the true cost. Debt is a sneaky little devil. It weasels its way in, delaying the pain of a purchase until later. It masks itself, so you don’t even realize the true cost of what you’ve just bought. Accruing more and more debt starts to feel normal… until you can’t even distinguish the damage it’s doing to your money, your life, and your dreams.

•Debt is a cycle that keeps building on itself. Debt never gets better. It only gets worse. The free money is addictive, but it’s only hiding the financial pain. The more you use it, the more you need, and the worse it gets. The only way out of it, the only way to heal your finances, is to pay it off.

•Debt makes everything more expensive. You didn’t think all this “free money” was actually free, did you? Lenders are in the business of making money, and they do it by charging you interest, month after month. Whenever you finance a purchase, you’re going to pay more for it in the long run – sometimes a lot more.

What Can You Do Now?

That’s all fine and good, you think, and maybe you wish you’d realized it sooner. But, you’re already in debt – so what should you do now?

We’ve come to the first step in our journey to debt freedom:

We need to recognize that we have a problem.

Yes, we are addicted to debt.

We know it’s hard to admit, but it’s the truth… and it’s the first step to recovery.

To really drive home this point, we need to assess the situation, understand the damage we’re dealing with, and fully acknowledge the problem. Here’s how.

First, bust out all of your bills and stack them into a pile. Now, take out the bills for your monthly living expenses – such as electric and gas utilities, insurance, childcare, cable, internet, and phone bills – and set them aside.

You should now have a pile of bills for items you financed. These might include credit card bills, your mortgage, car payments, furniture financing or store credit card bills, student loans, and other debts. Add up the total balance owed on each bill – not the minimum monthly payment, but the outstanding balance or remaining principal on each loan. This is the total amount of debt you owe. Grab a sheet of paper and write it down.

Next, subtract the amount of mortgage debt you owe from the total. This is your non-mortgage debt, and that is what we want you to focus on zeroing down in this book.

Grab another sheet of paper, and this time write down your total non-mortgage debt in the biggest, boldest, most horrifically disgusting gigantic black numbers that will fit on the page.

Look at that monster and see it clearly for what it is. Stare at it and let it sink in.

Shocking, isn’t it?

That’s your debt… and it is holding you back from the life you deserve.

Keep staring at it until you’ve really internalized what this debt means to you. Understand what this number represents, what that money could have been used for, and how it continues to hold you back.

Let it sink in.

Now, take that piece of paper and destroy it. Crumple it up, light it on fire, or tear that mothereffer to shreds! Scream out to the world and promise yourself, “Never again!”

Your debt doesn’t own you, it doesn’t define you, and you will overcome it!

When you perform this crazy stunt, you’re going to feel a sense of relief, a sense of accomplishment, and a sense of control that you never even knew existed.

Now you know what the problem is. You know what it looks like. It’s time to zero it down. It’s time to attack.

Action Items

Gather all of your debts together. Total them up so you know how much you owe in both total debt and non-mortgage debt. Write it down and internalize it. Acknowledge the problem and understand what it is costing you. Then, reassert your commitment to defeating it.

Don’t get intimidated or discouraged. Remember, even the longest journeys start with a single step. We’re going to defeat this monster together, one step at a time. You got this.

1. 2015 American Household Credit Card Debt Survey, Nerdwallet, https://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/, April 15, 2016.