The one habit you need to get out of debt
Deciding I need to cut my losses and close my company was the worst day of my life.
I lost a lot of things I thought were valuable, and in return I had debt to pay off.
But after 3 years, it's no joke that it was one of the best experiences of my life.
The reason is that I was able to gain a good habit to stay out of debt for the rest of my life.
And if it weren't for the failure of my first business, I probably won't have the habit of keeping a surplus every month.
Today I want to share my story about how I picked up the habit of staying on surplus every month.
What I learned in the live-in construction job
I needed to figure out how to get cash to pay off the debt, but at the time was during the pandemic so jobs had limitations.
When I was searching online, I found a job opening for a live-in construction job. Pay is daily which was what I needed so I picked up the phone and applied.
Despite what I imagined the president of the company had a generous voice and told me that most people working there are all having financial issues but they have a good system to get out.
He was nice enough to come pick me up. He explained that work will start the next day.
The payment system that led to my good habit
We got into groups of four and went out to work. Breakfast and a bento box lunch was provided from the company.
I would make about 10,000JPY/ day. When I'm back at the dormitory, I would get 5,000JPY in cash. The other 5000 would be pooled to pay off my insurance, dormitory fee, pension, and taxes and at the end of the month, what's left will be paid in full.
This is an amazing system as I could make my payments everyday. I kept 1,000JPY to save, another 1,000JPY for drinks and snacks, and the 3,000JPY to pay off my debt.
I remembered Bancil, the main character of the book,"The Richest Man in Babylon" did the same kind of thing to pay off his debt. Now I'm not just reading the book I'm living it.
Since I'm paying back everyday with a plan the loaners weren't chasing me anymore. The path to pay back is fixed, so I just need to go through it.
My colleagues were all doing the same thing, keeping the cost as low as possible, and paying back every day. We all stopped by at the ATM the next morning to pay back our loans which I remember giving me relief that I wasn't alone.
When we were back at the dorm, in front was a river, a park, and the rest were all factories.
It might have been on purpose to put the dormitory there to cut all kinds of temptations.
We were tired from the manual labor, so it didn't matter much, I would go right to sleep. Then the next thing I know is the same labor.
The habit is what matters
Whether you get into financial freedom or financial debt, it's not about how smart you are but the habit that counts.
Even if I save 1,000JPY/day, that's 30,000JPY/month. At the end of the month, I will have the rest of the pay which will give me a good surplus every month.
This is the habit you need to get out of debt. End the month on a surplus.
When I got used to this habit, it felt weird not to.
In a year, it's 360,000JPY. In 10 years 3,600,000JPY. More than 10 millionJPY in 30 years.
I was honestly in a rush to make money before, but money will follow when you give time to grow. I learned and decided that growing it slowly and surely is vital.
From then onwards, I'm not in a rush. Instead of stressing to make money fast, I'm more focused on my life to be fulfilling. But making sure that I stay on surplus every month, is what I learned thanks to experiencing what it's like to be in debt.
Having a simple good habit helped me out of debt.
It's up to you
I'm not saying that this system of getting daily cash and distributing in a decided amount will work for everyone.
You need to choose to continue the habit.
It was a valuable lesson to work in the construction company, because I really saw who goes out of debt and who doesn't.
One guy came to my room and confess that it's difficult to stop gambling on his off day, or to stop drinking, or going to prostitutes.
Some will actually try to use the daily cash to gamble their way out of debt. It might work once in awhile, but then that person will get into debt again some day.
Of course, I also saw some people that admit that they made a mistake, and staying discipline to not repeat the same mistakes.
It's just this simple habit of ending the month in a surplus that decides whether you can stay out of debt or not.
To get out of debt, first end the month on a surplus
If you're in debt what I can say is to end the month on a surplus.
Set aside your luxury for later, keep costs low, and divide necessities and wants.
Pay the necessities, and have the habit of saving your surplus every month even if it's small.
If the interest is more than what you're paying back then your loan will keep growing.
So then you have the option of hiring a lawyer for arbitrary arrangement or filing bankruptcy.
But even if you use this, the habit of ending the month on a surplus is the best answer that keeps you out of getting in debt again.
I'm glad I picked up the good habit of ending the month in a surplus, and now being able to grow my wealth little by little.
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