Most people believe their debt is the reason they can’t save, travel, or feel free with their money. But here’s the truth: your debt isn’t the villain, the story you’re telling yourself about your debt is what’s holding you back.
In this episode of Money Files, I unpack one of the biggest mindset shifts that changed my own financial life and has transformed the lives of my clients: learning how to stop villainizing debt and start rewriting your money story.
I’ll share my journey of paying $500 a month toward student loans in my 20s, and how shifting my perspective helped me stop waiting for freedom and start creating it even while carrying debt. You’ll also hear client examples that reveal how often we think debt is the problem, when the truth is, the lifestyle we want simply requires more clarity, intention, or income.
If you’ve ever said, “I’d be further ahead if I didn’t have this debt,” this episode is for you. You don’t have to wait for a zero balance to feel at peace. You can create freedom now.
Listen to learn:
[01:05] Why the real problem isn’t your debt, it’s the story you’re telling yourself
[06:18] How a mindset shift turned $500 student loan payments into opportunity
[10:30] The exercise I walk clients through to uncover what’s really holding them back
[16:42] Why more income, not less debt, might be the key to funding the life you want
[22:55] How to live, save, and pay off debt at the same time
[28:20] The real byproduct of shifting your money story: peace, confidence, and freedom now
Tune into this episode of Money Files to discover how to stop villainizing your debt and start living the life you want even before it’s all paid off.
Are you ready to start asking for help with your finances? Apply to work with me, and let’s start working towards your financial goals.
If you loved hearing about how to shift your money story, check out Episode 177: The Hidden Cost of Rushing Through Debt Repayment. Together, these episodes will help you see debt differently and start building a financial system that actually supports the life you want.
Transcript for “The Surprising Mindset Shift That Makes Paying Off Debt Easier”
Intro: Hi, and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work everyday with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances.
Keina: Hello and welcome back to another episode of Money Files. I want to talk to you today about something that I had to reconcile with myself, especially in my twenties. And I was reminded of the shift that I had to take from working with one of my clients. And then also I was on a consult with someone and it just reminded me of one of the most impactful shifts that I made with my own money. And I want to help you change the way that you’re actually thinking about your debt. Not in a just be positive, not in a ignore it and it’s going to go away, but just in a way that can really ground and help you shift the story that you’re telling. Because the problem with debt isn’t the debt, I actually think the problem is the story that you’re telling yourself about the debt. Because when we have debt, whether it’s student loan debt or some part of our mortgage that we don’t like, like an HOA fee, we are generally shaming ourselves about how we got into this situation.
How did we let it get so bad? How did I not know? And so that story villainize the debt. And what I find is that it keeps us locked into a specific mindset and we start talking about like, I’d be doing so much better if I didn’t have the debt and I just need to pay this off before I can do X, Y, and Z. And so that debt has us in bondage and I realized this back in my twenties, I was paying about $500 a month in student loan debt. And we all know what student loan debt feels like, right? And at the time that $500 was a significant portion of what I was making a year, and I felt like it was taking everything from me. And I was in that cycle of if I didn’t have this student loan debt, then I would be able to travel more. If I didn’t have the student loan debt, I would be able to save more. If I didn’t have the student loan debt, I would have more discretionary spending. It was all about if I didn’t have the student loan debt, what I would be able to do. And thinking about like how I didn’t know about the impact of student loans, there were just a lot of stories about my debt and really thinking about how much further along I would be if I didn’t have my debt.
And at some point something shifted where I started to think about my student loan debt differently. And I would tell myself like, you know what? My student loan debt actually has made me be really thoughtful about how I’m managing my money. And so I started to be grateful for the student loan debt. It helped me not hate the student loan debt and to stop telling myself these stories about how I could be further ahead. And so I really shifted to a place where I thought to myself like, what if that $500 I’m paying towards my student loan debt? What if I’m never getting it back? What if it’s never going to become a part of my budget again? And I don’t mean that in a hopeless way, like oh my goodness, but I meant it in a space and in a reality for myself that what if that money is always going to be spoken for in my life?
So right now it’s a student loan payment, but in a few years it could be a car payment, or if I have kids, it could be daycare or it could be going towards fixing something in my house. So what I realized was that the $500 wasn’t actually the problem. It was just the fact that I was living in one season of my financial story and that the things that I desired, the space that I wanted with my money wasn’t going to come from my student loan disappearing. It actually was going to come because I needed to decide to stop waiting for my money to change. And I needed to start changing how I thought about my finances. And so with you, one of the traps that I am realizing is that you’re falling into this trap that you think that relief is going to come after the debt is gone. And that relief isn’t going to come after the debt is gone.
That relief and what you’re desiring to release that anxiety, to release your stress, to release the uncertainty that’s caused by whatever debt you have. More often than not, the relief is going to come with you shifting your story. What’s really causing the stuckness that you feel right now is the story that you’re telling yourself. Your debt is not the villain. Shame is the villain. Your avoidance is the villain. Your inaction is the villain. Or in some cases your action is the villain because how are you living because you feel like you’re always going to be under this umbrella of debt that you have no way out, right? You’re literally crafting your own story and so you’re waiting to feel free, but the thing that’s holding you back is inside of you. The thing holding you back is your brain.
And one of my clients that I worked with earlier this year when we started working together, she had a lot of debt. I can’t remember exactly how much she had, but it was over five figures worth of debt. And she had racked up the debt from experiences and travel. On top of that, she also had a mortgage payment and she had an HOA payment. And so she really, really, really wanted to be out of her relationship with debt and with the debt payments that she was making month to month, it weighed really heavily on her. And she’s thinking about like, if I didn’t have this credit card debt, then I’d be able to do so much more with my money and I would be able to travel more Keina, I’d be able to shop more.
So she was telling me all these things that she’d be able to do and I said, okay, great. Let’s make a budget and pretend like all your debt is gone. Let’s just actually see what’s on the line with your debt. So we made a budget where she didn’t have any debt and I said, now what are you going to use the money now that your debt is freed up? What are you going to use that money to fund in your life? What goals is it funding? What values is it funding? Like how do you see yourself living? And what she found when we did that exercise was that even without the debt, she was still underfunded. And when I say underfunded, I mean that like she still didn’t have the money that she thought that she had because she’s thinking like, oh my goodness, this debt is holding me back so much. And the truth is, the lifestyle that you actually desire just requires more funding. Like it’s not really about the debt, it’s that for the lifestyle that you want to live, you actually need to earn more money.
And she hadn’t yet created that vision for herself. It’s being stuck in the, if I make more money, will it actually solve the problem? And so I just pushed her to get curious about what would life be like if you actually didn’t have the debt? And helping her realize, like, I want you to focus on what’s in your control. I want you to stop telling yourself that the debt is the thing holding you back. What if you are actually holding yourself back? What if you have the ability to earn 30 more thousand dollars? What if you have the ability to earn $60,000 more each year? What impact would that create on your life? And would you actually care about the debt at that point? And so what shifted from us having that conversation is that we started to build her future and where she wanted to be financially void of whether or not her debt was paid off. Because sometimes we hold ourselves back from our dream because we are so engrossed in the fact that we feel like our debt is holding us back.
And so we’re not doing the things that could support us, that could help us. And we’re not actually looking at what we can do right now and how we can be okay and we can feel good about being in the middle of shifting to becoming debt free, right? To shifting, to being able to have more discretionary income. And I had a similar conversation with somebody on my consult the other day. She was telling me, well, if I just didn’t have this HOA fee, it was just close to $800, I’d be able to do so much more. Oh my God. I mean, I guess, but also what if you just need to make more money, right? Like what if that $800 is actually just never going to be in your hands because it is just the cost of living with where you live. She lives in California and it’s like, what if that’s just the cost of living? And so if we can neutralize where our money is going, like how it’s going out in the form of debt payments, then what else can you lean into?
If debt isn’t the problem, what else and how else will you support yourself? So I want you to consider like what if your debt doesn’t have to go away for your story to change? What if your peace of mind doesn’t have to wait? It can be true that you have credit card payments and that you’re ready to earn more. It can be true that you’re paying off loans and building savings. It can be true that your past created this debt and your present is creating a future that looks nothing like your past. I want you to take from this episode that you have to stop villainizing your debt. And you need to start asking, what story am I telling myself right now about this season of my life? What would change if I gave myself permission to live while paying my debt off? What if I took away the debt payments in my budget, right?
What are the things that I’m feeling like are underfunded and where is there maybe even just an incorrect thought about how much more money I would have? And being able to just play with these things is going to give you a level of curiosity. I think curiosity is the thing that I love for clients to be able to play with as we are working through their finances, because it keeps them in forward action. It keeps them in a space where they start to see budgeting as something that is sustainable in their life and something that they do. Because when you shift your story, you’re going to be able to build trust with yourself. You are going to be able to make intentional decisions, you’re going to get experience, you are going to get to experience the life that you want right now and not just one day. And the best part of this is as you are putting yourself in a place where you can say, I can have debt, I can save money, and I can look to earn more money, like I can do all of these things
As you pay off your debt and you stop telling yourself about woe is me. Oh my goodness, if I didn’t have this, I’d be able to do this. You’re going to pay off your debt because you’re not going to be doing this little sing-songy thing about your debt. You are going to have money in the bank and the money in the bank that you’ve saved is going to keep you from going back into debt and you are going to have that extra money that you’ve been thinking about because you started to craft and think about a new vision for your life. When I accepted the fact that the $500 was just always going to be there. I challenge myself, I was like how could I make $500 a month, right? If I am so up in arms about this $500 that I’m putting towards my student loans, is there a way for me to make 500 extra dollars in a month?
And I started leveraging my teaching skills and I started tutoring. And so I was able to use that tutoring money to save more, to be able to fund vacations. I even used it to accelerate some of my debt payoff. So it took me out of the place of just talking about my debt and how my debt was hurting me and all of these things to actually helping me accelerate how fast I was able to pay you off the debt for me to be able to have extra money for experiences. But also it helped me create and craft a conversation about how much money do I really want to make. Also, as I transitioned at the time, I was a teacher and then I moved to a vice principal. It helped me also negotiate my salary in the education system. Like so many of my clients that are in nonprofit, they think that they cannot negotiate their salary.
You can. You just got to be willing to ask for it, and you gotta know, what am I asking for? And so many times I think the other thought about budgeting is that it’s like budgeting is just for when you don’t make enough money. No. Budgeting is to help you live this lifestyle that you desire. Budgeting is to help you build wealth. And your budget can support you in a plethora of different ways. In terms of, like, for me, my budgeting at that time made me feel really confident about asking for more money. My budget helped me be creative about using the skills that I had to create extra income. And my budget helped me build a safety net to be able to leave my job. And so all of these things are the byproducts of budgeting, the byproduct of changing your story about debt and what you want it to make it mean in your life.
So kind of went on a little tangent there, but I really want you to know that you have to investigate the stories that you’re telling yourself. And when we can shift, especially the thought that budgeting is just for when we don’t make a lot of money and I make too much money to need to budget, when we can really investigate and change that story, we can also change our life. We can change what money does to us. We can change how money makes us feel. It’s going to change our confidence in order to be able to have money conversations, not just with your own finances, but just thinking about how that works when you are thinking about negotiating your salary at work. So for this week, I want you to do what I asked my client to do.
If you have something in your life, in your budget that you’re like, oh my goodness, like if I didn’t have this payment, maybe it’s debt. Most oftentimes it’s debt in the form of car, could be some part of a mortgage, it could be credit card. Maybe you feel like there’s this thing holding you back. I want you to pretend like you don’t have the student loans, like you don’t have the credit cards, like, you don’t have the car payment. And I want you to ask yourself, what would you do if you freed that money up in your life? Would it truly change how I feel right now? Or do I still need to earn more, dream more? Or do I need to plan better? And most importantly, I want you to ask yourself, what would it look like to stop waiting and start freeing myself up now?
What would it look like to step into the piece that I want to have now? And that’s the work that is going to get you to a place where you’re starting to build a surplus in your accounts. The potential client that I had a consult with, I was like you’re worried about your HOA and I see a clear way for us to start building a savings account, but you’re so worried about like if you didn’t have this HOA payment, you’d be able to save. And I told her, I was like, if you weren’t paying $115 for Hulu, you could save. And so sometimes we are looking at some other really big thing that we miss the small thing that we could actually shift in order to change how we manage our finances. So if this episode resonated with you, definitely share it with another person.
But also if you have been listening to my podcast, whether this episode one or episode two, and you’re like, Keina, I resonate with what you’re saying and I know that you can help me. I’m inviting you to apply to work with me in my five month coaching partnership because I want to help you change your stories around debt. But I also want to help you create a money system that allows you to be able to save money and pay off debt at the same time and reshape how you manage your paycheck week to week, month to month, so that you’re actually able to have a surplus of money and spend on more of the things that you love. So you can go to my show notes or you can go to wealthovernow.com and you can apply to work with me. The consult is an hour, it’s free. There is no obligation to buy. But I think after you spend an hour with me, you’ll definitely be able to see how coaching can help you in your life, because I’m going to lay out a plan with everything that we will do together for five months. So thank you so much for tuning in and I look forward to chatting with you next week.
Outro: Thank you so much for listening to Money Files. If you’re ready to take the next step to reach your financial goals, head to www.wealthovernow.com/appointment and let’s get started.
