First steps to being debt free in NYC: unconventional ideas to kill debt from a Holistic Online Financial Coach

Approximate read time: 6 minutes

You’ve done everything right, but still feel the crush of debt. You went to school (and racked up those student loans), you’ve got a great job that pays well, but still, the debt never seems to die… and worse sometimes you still need to use debt just to live!

Add to the debt the absolutely ridiculous cost of living, an uncertain job market, and somehow not having (or keeping) savings while working your ass off, and there’s a point where it’s difficult to keep trying to pay down that debt. Why try if it kind of feels like you’ll die with the debt long before you can afford a house or (gasp) retire?

Want to Kill Debt? Learn How to Trust Yourself With Money Again

Conventional financial wisdom on debt is fairly black and white… There’s good debt and bad debt, and if you have bad debt you just need to restrict yourself until you don’t have any more debt! This overly simplistic way of thinking rarely works. This kind of restriction makes thinking about the future difficult and is often full of failure. So of course we can’t trust ourselves to make better choices in the future!

If the restriction was going to work to magically stick to a budget and pay off debt, it would have worked by now.

Developing a debt-payoff strategy while simultaneously working on a debt mindset has been the easiest and fastest way I’ve seen my clients not only pay down their debt but grow their savings and prevent taking on more debt.

Let’s talk about some ways I help my clients pay down their debt even if they live in a city that never sleeps.

Tips From an Online Financial Coach in New York On Killing Debt

Practice Being Aware of Your Financial Behavior WITHOUT Judgment

This is probably the single most important part of changing your mindset around debt, and by extension, being able to pay off your debt. Shame and judgment only increase pressure, and our brains do not make good, thoughtful, future-focused decisions when we feel pressured. Self-judgment kills objectivity, creativity, and focus. The self-judgy mindset is deeply selfish and sluggish.

Awareness without judgment (grace) means we get a little break from the pressure and urgency that stokes impatience. And it means we can trust ourselves with money, which is the same as resilience. The quickest and easiest way to practice being aware of your financial behaviors without judgment is to imagine that you are a scientist following yourself around. You’re just observing your behavior and taking notes.

What kinds of patterns do you notice in your behavior? What kinds of reactions do you notice in yourself around your debt? Only by being aware of your actions and reactions around your debt WITHOUT judging yourself can you first change your relationship with debt, and then begin to reduce it.

Evaluate the System You’re Using to Pay Off Your Debts, Not Yourself

Every strategy has upsides and risks, and there is no one right way to do a debt payoff. How YOU pay off your debt will depend on a great number of factors and can’t be prescribed to you by some expert, especially me. So how do I help my clients strategically pay down debt?

Well, we spend some time playing with this nifty debt calculator that lets us run through scenarios, play around with what it looks like to take on more debt, apply lump sums, and play with the order the debt is paid off.

Playing with a calculator like this and thinking through scenarios means you’re testing out the debt-payoff strategy before you even start it. If you try to fit your life into any structure, system, or strategy, that strategy WILL fail. And that’s no fault of yours.

I’ve never expected my clients to fit into a budget or debt payoff strategy. As you’re contemplating which strategy to use, keep in mind that any budget or system you use must comply with your life.

Build a Customized Budget That Meets You Where You Are Right Now

An adaptive, evolving, customized budget cannot be downloaded off the internet and then plugged into your life. Those premade, prescriptive, restrictive budgets might work for you for a month, and then your life changes and it won’t keep up.

Your June probably looks different than your December, for example, and you’ll need a slightly different system for each month. Your life WILL change. And I want change for you! Imagine how boring it would be if you could successfully spend exactly the same amount of money on the exact same things month after month, year after year.

Your budget, spending plan, or whatever you call it, MUST change with you. Whether the changes to your life are choices you made or choices that were made for you, your budget must adapt. And it must be customized TO YOU. Which means it must comply with your life. A customized budget gets easier to use over time, not harder, and it should be intuitive.

Build Savings Slowly and Intentionally

There is a bit of conventional “wisdom” out there that says you shouldn’t start building your savings until you’ve paid off your debt. This is typically touted because the interest rates on even high-earning savings accounts are small potatoes compared to the interest rate you’re paying on debt. While that’s a valid point, it’s not sustainable.

If you want to prevent yourself from taking on more debt, the single biggest thing you can do is build savings. Even if you’re building at the rate of $10 a month, it matters. Think of savings as anti-debt and financial resilience!

A quick note on debt settlement services!

The NYC Department of Consumer and Worker Protection (DCWP) has this to say about debt settlement services: “Beware of services that claim they can eliminate or “settle” your debts. In the majority of cases, debt settlement does not work and can cost you thousands of dollars in fees, leaving you even further in debt.” I could not agree more. I appreciate how painful and urgent debt can feel, but it’s worth a few minutes of your time to be skeptical of debt payoff claims.

Also, NYC has a good free resource for financial counseling! 

You Can Pay Off Debt No Matter Where You Live

Even if you live in one of the most expensive cities in the United States, you can still pay off debt, build savings, and not feel restricted! What would you be able to do if you could trust yourself with money again?

Next recommended article: Building Savings as a Couple in NYC

Break Free From Your Debt With The Help of an Online Finacial Coach in New York, California, Texas, and anywhere else in the United States!

Ready to take control of your finances and become debt-free in the hustle and bustle of New York City? Look no further! At Pacific Stoa, our online financial coaching service offers personalized guidance and support tailored to your unique situation, empowering you to achieve your goals and secure a brighter financial future. Take the first step towards financial freedom with an online financial coach by following these three simple steps:

1. Reach out to me to schedule an appointment and see if Financial Coaching Services are right for you!

2. Begin meeting with me, Hanna Morrell, a skilled financial coach

3. Learn to be debt-free while living in New York!

Other Services Offered at Pacific Stoa

At Pacific Stoa, I want to make sure you have everything you need when it comes to managing your finances. So as a skilled online financial coach here to help you navigate debt while living in New York, I provide Financial Coaching for Individuals, Financial Coaching for Couples, Financial Coaching for Divorce and Separation, and Financial Coaching for Families. I also offer Financial Consulting for Nonprofits and Businesses to help create a customized strategy built specifically for you, your organization, and those you serve. Check out my FAQ to learn more about Financial Coaching and my Blog!