First Person: Getting Into the Money Mindset, Getting Out of Debt

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Some people who are broke are just down on their luck. But I've noticed broke people are often broken people.

I had dinner with a broke friend who is struggling to pay her bills. Her life is falling apart on many levels, but she has a survival instinct that is kicking in. I can relate to her pain because I've had times in my life when I sabotaged my financial security for illogical, emotional reasons. I had to stop my self-destructive habits and adopt a positive money mindset to become financially stable. I shared with my friend my money mindset for staying financially secure.

Stay in survival mode

I told my friend I create artificial panic so that I will stay motivated to make money and find new ways to make more money even when there is no imminent financial concern. Being in a money mindset, to me, means I keep the money flowing in and prevent too much from flowing out. My friend has a good sense of humor, and knows that just hearing about her financial disasters puts me in panic mode so I work and save more.

Know what's first and what's last

My friend gets overwhelmed by the many bills she has on her plate. I told her to zero in on the No. 1 priority and let the unimportant and less urgent matters go. In her case, she needs to use her tax return money to pay her overdue mortgage. She doesn't need to worry about what people think about her hairstyle or the curb appeal of her front yard that lacks landscaping.

Respect money as you respect yourself

I used to think that I didn't deserve to have money in the bank. I didn't want to be a money hoarder. But I found people who don't save end up depending on other people for handouts. I found the more I respected myself, the more I wanted to live below my means. I respected other people enough to let them work for their own money. My friend realized that money she had given away in the past year had become "beer and cigarette" money the people she thought she was helping.

Work with what you have

My broke friend taught me a few things during our dinner. I noticed that she had become extremely resourceful in the past few weeks. Since she can't afford Internet service at home, she rotates between the public library and coffee shops that provide remote Internet access. While she bids on major freelance projects, she takes small jobs she would have scoffed at in the past. She taught me to fill my time with smaller ways to make money as I continue to pursue the more lucrative deals.

Settle down to settle debt

Both my friend and I have made vows to never return to self-destructive behaviors. We have both been guilty in the past of moving frequently to try to solve our problems. Now my friend is working hard to get back to where she was financially just 6 months ago. By the time she moves back into her home (which she is renting out to pay her bills) she will have moved four times in the past year. With her new money mindset she will stay settled so she can settle her debts.

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