How to get out of debt – 14 tips

The Total Money Makeover

First of all I have to say I am not some financial guru. Just a few years ago my finances were a mess. I didn’t know it at the time, but once I started improving them I realized the obvious. My finances were a mess. I knew something was wrong, but I couldn’t pinpoint it. I couldn’t help the people I love, I couldn’t make a difference for the causes I cared, my business was struggling and I had to borrow cash each time there was a big spending on the horizon. Like a minor fix on the car. Sound familiar?

Getting a loan was so easy!

Credit card number one, credit card number two, overdraft, loan number one, loan number two…

Before I knew it, I had too much month at the end of the money, and my only source of income at the time was a new fledgling startup that just received an angel investment. I was lucky because I was able to sell my first company which helped take care some of my debt, but that didn’t change my habits. We were barely making any income because the product from the new company was yet supposed to be fully developed, and it was a race against time. Later when it was becoming obvious that we aren’t capable of making the revenue to support the team, and no investor was coming to the rescue, the team started to fall apart. I resolved to what was my final loan to save the company. I was on my own, and I started with myself. I decided to first take care of my own finances before figuring out my business. So I read a few books, watched a few seminars, and more importantly I took action.

I started tracking my personal finances. I created a budget for me and my fiance. Together we made a firm decision to stick by it. We weren’t going to starve ourselves, we were still traveling, visiting family in different cities, there was time and money for our favorite cafe, but when the month was over, our personal finances had to be in the green.

Income > expenses. That was our number one rule. Then we started eliminating our debt, and after we were done with that, we started saving some money. We realized that “income > expenses” is easier if you work both on improving your income AND reducing your expenses. We learned that you also need to financially reward yourself and the ones closest to you, so that the struggle makes sense. When you do it like that, your rewards are thought out, and you make the decision based on your real wants and needs.

I think one of the books that really captures those steps is The Total Money Makeover by Dave Ramsey. It doesn’t cover everything, and you still have to act (not just read the book), but it is a great start for someone who is clueless and needs help! Nothing wrong in needing financial help, you are definitely in the majority on this fine planet. I think it’s one of the ultimate mysteries. How do you explain two different families living in the same city, one barely getting by with $1000, and the other also barely getting by with $1500. Shouldn’t the one with $1500 be well off since they are making as much as 50% more than the other family? Somehow we find a way to mess it all up. I remember one of my investors telling me a story about his friend. His friend got a raise, and then he sold his old car, and bought a brand new car with a loan. Why in the world would you do that? Couple years later my friend did the same thing.

You can get out of debt, only when you decide that you really want to get out of debt. If you put other things before getting out of debt, you will never get out of debt.

Another important thing I found out during my financial crusade was that the little habits I originally thought weren’t that dangerous were in fact really dangerous. Think of it like this, if you pay something EVERY month, you really have to be 100% certain that you absolutely need that. Otherwise, it’s not “just $5”, it is at least “$60” (x12 / per year) and once you calculate in opportunity cost (if you invested those $60 dollars elsewhere) it snowballs into a much larger problem or should we say opportunity. This is especially important if you are an entrepreneur. $60 spent elsewhere are the $60 that weren’t invested in your business. Some may say, $60, that’s nothing. Few years ago, I would agree with you 100%. But now I know my customer acquisition cost (CAC), and I can tell you exactly how many clients I could get with $60. I could also tell you our customer lifetime value (CLV), and how much exactly we didn’t make because the measly $60 were spent elsewhere…

I don’t want to say quit smoking, and invest the money in a tobacco company but if you do the math yourself you could get a compelling reason to do so. Obviously you’ve decided that smoking means more to you than financial freedom, which is totally OK if you’ve accepted this as your destiny. I am using this example only to explain the root of the problem. You can get out of debt, only when you decide that you really want to get out of debt. If you put other things before getting out of debt, you will never get out of debt. Some of you may be asking, can I get out of debt and still indulge in that one thing I love to enjoy the pleasure of? Sure you can, but you will probably have to cut of something else, so that you at least start to spend less than you earn.

Recently I listened to an audiobook on personal finances, The Total Money Makeover, by Dave Ramsey. Watch the video below to see what 5 takeaways I got from it.

If you are watching this video, and reading this blog post I think we can both agree life isn’t so bad. You can afford a device with Internet access. Billions of people don’t have this privilege and opportunity. Earlier I mentioned $60. What if life was such a struggle that $60 sounds like a lot of money! I hear you, I’ve been there! You have to start somewhere, and the next best thing after money is time. You have to be careful how you spend time. Think of it like budgeting your time in a day, or in a month. If you keep spending time with the same people that aren’t going anywhere, guess what are the chances you won’t go anywhere either? Exactly.

You have to spend quality time on improving your skills (books, courses, seminars) and looking for opportunities (networking, cold calls, brainstorm business ideas, send CVs). If you are not spending at least 8-12 hours per day on these activities (when you are tight on cash), you won’t get far. Again, same problem with finances, if there’s something more important than getting ahead in life (like playing video games) you aren’t going anywhere. I don’t have anything against you if you are playing video games (I was once like that myself) but five, ten or twenty years down the road I can almost guarantee; you aren’t going to be happy.

In closing, I can say that getting out of debt is easy, once you find a good reason for it. As I mentioned before, once you put getting out of debt on the top of your list, you will find a way. Why? Because recipe is so simple it sounds stupid. Spend less than you earn. Don’t buy stuff you don’t need, sell stuff you don’t need, increase your income, save and invest the difference. That’s step one. Within one year, you can be clear of debt, and ahead of majority of people living around you. Maybe you are going to drive an old car, or have to rent an apartment (car and a home are biggest purchases most people will ever make), but this is secondary! Getting out of debt in my opinion, needs to be your number one priority!

Fourteen ways to get out of debt

  1. Sell stuff that are lying around house and / or in your garage and attic
  2. If you are an entrepreneur, increase your revenue by: raising prices/providing more value, increase the frequency of purchase from current clients, get more clients
  3. If you are not an entrepreneur (become one, at least part time – check job opportunities on Upwork, Fiverr ) or ask your employer how you could provide more value so that you get a raise
  4. Track how you spend time and money, this will give you a great clue where you are making mistakes
  5. If you don’t have time for the first 4 advices, stop doing one of the most unproductive activities in your day, and do any of the first advices listed here
  6. Set a written budget, do whatever it takes to know how much exactly you can spend on each category, and whatever you do, don’t cross that budget
  7. When you set your budget, include: emergency saving, debt payoff, donations (if you are not way-way-way in the red). Giving any amount of money that helps someone or something you care about, will fill your heart and give you energy to proceed on your crusade.
  8. If the debt is huge, you have no choice but becoming an entrepreneur. As long as you are changing time for money (working for a paycheck) it will take you a very long time to payoff your debt
  9. Don’t take new debt to refinance the old debt unless you absolutely know what you are doing. Since you are here, I’ll assume you don’t so I’ll advise you to not to get a new loan. I also made the same fatal mistake few years ago! I got a loan, to clear my overdraft debt. A year later I had a loan to repay, and I was again deep in the overdraft.
  10. If the temptation is to great, eliminate it completely! If you can’t control your credit card spending, cut the credit card. If you can’t control your overdraft, call your bank to cancel your overdraft.
  11. This one is tricky. If you already sold everything your “don’t need” it’s time to rethink what you don’t need. Do you really need a tablet if you have a smart phone? Do you need a DSLR if you have an expensive smart phone? Do you really need to watch Netflix, or should you work on improving your skills?
  12. Once you gain momentum or you get out of debt, resolve to never make the same mistake! Take note of the changes that set you free, keep repeating those actions, and never repeat the mistakes that got you here in the first place!
  13. Stop paying stuff with credit cards, or with 6-12 months “easy pays”. It’s very hard to control your expenses like that, and especially if you are in debt. If you really, really, REALLY need to buy something, sell something else, increase your income and talk with a third party to help decide if you really need this thing you can’t afford.
  14. Get everybody under your roof to be on the same page! If your spouse spends whatever you saved, you will soon be in debt, or single.

5 takeaways from The Sales Bible

the sales bible

I recorded another video for my YouTube channel. This time I was doing something differently. I recorded the video in my living room, so I didn’t have to hold the camera in my hand (which can be a trouble after 2 x 10 minutes of recording). (Don’t believe me? Try it.)

Another news, the microphone I bought already broke down, so I ordered a new one from Amazon. Hopefully this one will actually work at least a year. This things aren’t that cheap…

I only made 1 recording of The Sales Bible, so it’s not really perfect, but I had to keep moving so we’re going to have to suck it up, and let it be. It’s not so much that I didn’t travel in the past two weeks (although my car is in the workshop for the past 7 days #IncompetentMechanic), it’s just that I wanted to keep recording, I already read books, so I already have other in the pipeline. And I wanted to see how it would work with indoor videos, lighting, and especially sound now that I am without a microphone.

The book itself was great, and I actually listened to it twice (I sometimes do that) in two weeks. And as you’ll see from the video, the whole point of sales is to do what you learned and move forward, not just read and think. You have to act. Actually, that’s common with every book, but that’s especially evident when it comes to learning a new skill, like sales.

In short, the five takeaways are:
1. Failure is an event, not a person – Zig Ziglar. Failure is not about insecurity, it’s about lack of execution.
2. When asked a buying question, move in to close the client.
3. Selling is not telling its asking questions and listening.
4. The 10.5 Commandments of Sales Success.
5. One of most repeated word throughout the book was rapport.

Oh yes, I also wanted to showcase the new T-shirt that I got from Permia. I just couldn’t wait for warmer days to show it to you.

Is now the time to invest in gold?

It’s no surprise I am interested in four letter .com domains. Compared to three letter .com domains, they are like the silver (trading mostly in low hundreds). The three letter .com domains would then be like the gold, trading in low to mid five figures.

So that got me thinking, how does real gold work? Why some of greatest financial minds advise investing in gold? Last year I read Tony Robbins, Money: Master the Game where Ray Dalio shared his formula for accumulating wealth, known as the all seasons strategy.

Among other things, gold was in his portfolio and he also explained how 50% stocks and 50% bonds isn’t necessarily the right asset allocation. Why? Because history has shown that stocks handle 95% of the risk and bonds only 5%. So the percentages should be different, and there should be some gold in there. Why? I’ll give you sneak peak on one of my takeaways, since the US Dollar is off the gold standard, price of gold per ounce went up 3000% since 1971.

Anyway, I thought to myself… Gold, that sounds easy, it’s a simple chemical element. Hence James Rickards, The New Case for Gold and my 5 takeaways after listening to this audiobook.

As for the recording itself, I was in Crikvenica and my microphone died after barely few months and 10 videos… I recorded this video without the microphone, what can I say, show must go on.

The Secret to Success

the secret to success ljubljana

Few years ago I watched Eric Thomas on Youtube, and his words made a lasting impact on me. When you want to succeed as bad as you want to breathe, then you’ll be successful. Wow… Don’t let nothing stop you!

I enjoyed Eric’s book The Secret to Success, and while I was in Ljubljana, Slovenia I was able to record my 5 takeaways. When I first started doing these videos I would freak out when I saw that somebody is about to walk by me while I was filming, and I would be anxious… But I want to stay true to my cause, valuable takeaways from a great book with a significant background. In this video I could sense the progress I’ve made with my confidence since I was standing in the middle of the a square in downtown Ljubljana with two buses of tourists just coming out. And here are was filming my 5 takeaways! Haha! If someone told me this couple months ago I wouldn’t believe it.

I know which book I am reading, but where do we make the next video?

The Power Of Broke

The Power Of Broke

New book, new city, new video, new post!
This time I was listening to an audiobook by Daymond John, The Power of broke. I liked the book, and I had no problem finding 5 takeaways, and I am looking forward to integrating them into my business. If you are a fan of Shark Tank like me, Daymond John doesn’t need an intro. If you are not, then suffice it to say Daymond John is the founder of Fubu a billion dollar clothing company, investor to dozens of startups and an advisor to US president Obama.

As for the recording of this video, I was able to make some progress by buying a cable extension for my microphone, so finally the microphone is under the shirt, not flying around (finally!)! Since my first video I couldn’t have imagined standing on a square with so many people and recording a video, but I am getting more and more comfortable in front of the camera (while people are walking by). This helps with the recording, takes less time and I am able to say what I actually intend to say. Also I am seeing progress with not reading so much of the screen. Earlier I was using my iPad as a clutch for reading, now my old iPhone does the trick.

I also changed the YouTube thumbnail just a little bit. For this video (and perhaps future videos as well) I’ve decided to start with the title and put my company’s logo at the bottom with a “sponsored by” tagline instead of just a dash. Here’s the video!

Be Obsessed Or Be Average

Be obsessed or be average

I just posted a new video on my YouTube channel. I finished listening to an audiobook called Be Obsessed Or Be Average by Grant Cardone. Although a good book, I liked his The 10X Rule more.

What I’ve improved in this video is the nagging microphone cable. It’s pretty short, so when I put the camera (aka my iPhone) on the stick, I run out of cable, so I couldn’t tuck inside of my shirt. Well, no more. I was able to find and purchase an extension cord (it was just a few US dollars), so now the wire won’t dance around while I am making the video.

In this video I was able to keep the reading to a minimum (if any), but there’s still a lot of progress to be made. I also liked the fact that this was recorded in one take. Meaning, walked to the peer, setup the camera and microphone, “shot the scene” and I was done.

I already finished listening some audiobooks, so I have to pick the right shooting place, and get the camera rolling.


The 10X Rule by Grant Cardone

The 10x rule by Grant Cardone

After a short break on my YouTube channel due to 2 books that didn’t meet my standards, and since I stopped reading after 40-50 pages, I was able to pick up the pace with Grant Cardone’s The 10X Rule!

Again, in my humble opinion, I was able to improve my video. This time by shooting with the new iPhone (what an improvement from my old iPhone). I also dropped my WhoAPI pitch that was first at the begining of the video, and then later at the end of the video. It just doesn’t add value to the video, but it makes it much longer. I’ll try to deal with this in the future, but for now I’ve decided to proceed without the hard pitch inside these short videos.

I already have some improvements planned for my next one, but let’s first enjoy this one.

Change Your Thinking Change Your Life

Change Your Thinking Change Your Life

I just published a new video, this time I recorded my 5 takeaways from Change Your Thinking, Change Your Life by Brian Tracy. I was in Moscenicka Draga, I often go there because of a beautiful beach.

Anyway, I made some progress again. I dropped the sunglasses,I mention WhoAPI at the end, and I’ve added custom thumbnails to all my videos. This was one of the most difficult videos to record so far. I was interrupted several times, it was very hot, and I changed the intro sequence to which I was just getting used to…

Next I am thinking about hiding the mic wire under my shirt (OMG can’t believe I didn’t see this sooner) I just hope the wire is long enough. I would like to read less from my notes. Also, perhaps try using a tripod and record with a back camera to get better video quality. But both of this could/would involve some editing, and/or help from a second person.

How to Stop Worrying and Start Living

Next book on my reading list was: “How to Stop Worrying and Start Living” by Dale Carnegie. This was on my list for a long time, and I noticed it after reading “How to Win Friends and Influence People”. Look like he specialized in long “how to” titles :). But nevertheless, his both books are all timers, and you can still learn a lot from them even after all those years.

The video below is a compilation of 5 takeaways that stood out to me personally, and I hope it helps you as well. This video was recorded in Fuzine, in front of lake Bajer.

5 top takeaways from Driven

Today I published my 7th book review on my Youtube channel. Changes I’ve made / noticed since my first video:
– Bought a small mic
– Bought a selfie stick
– Thinking about using a tripod (because of image shaking, and front iPhone camera), but this won’t allow me to show different angles (I don’t want to spend time editing the videos, yet)
– I don’t freak out (as much) in front of the camera
– I should memorize at least the first part of the video
– I should do at least 2 takes, and then pick the winner (I did this with only two videos)
– This is actually the first video I can watch without cringing

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