FMOOD 0103: The Fear of Big Payments - a podcast by Tom Merlino | Tom is inviting you to follow him on his journey to get out of debt and get into prosperity.
from 2017-03-29T06:00
Do you have a fear of making large payments towards your debt? I usually recommend saving up for a large payment and applying it towards the debt in huge chunks at a time. When you save up the money and put it aside to pay towards debt, it's an adrenaline rush. It also helps us to get into the habit of saving money for something. It's a good habit to train our brains to do this, especially when we've been used to simply putting purchases on a credit card rather than saving up cash.
It's understandable to be anxious about making a large payment, especially if you realize that this money is literally exiting your checking account forever. However, I think that you can get comfortable with this process as long as you keep in mind that your starter emergency fund should already be in place to use if you have a need for it. The key here is to only save up to the amount that is already in your starter emergency fund to use towards debt. In other words, if you have $1,000.00 saved for emergencies, then you can pay debt off in increments of up to $1,000.00. Once you realize that you can save up an additional amount of money on top of your starter emergency fund, you will get more and more comfortable with the process of saving money for a greater purpose. In this case, it's to get out of debt one large payment at a time.
Some folks feel comfort in knowing that they can pay down their credit cards and not be fearful or anxious because they can still use the available balance if need be. I don't recommend this way of thinking. You are actually telling yourself that it's still okay to go into debt. Instead of doing this, simply focus on your emergency fund for comfort while you make these large payments towards your debts. While I see nothing wrong with the responsible use of credit cards, if you are someone who is easily tempted to go back into debt irresponsibly, then I would highly recommend destroying the credit cards as quickly as possible.
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