Todd Christensen Profile Picture
Staff Writer at Debt Reduction Services

Eliminating debt and unnecessary expenses can help achieve financial peace of mind.

Balance Your Finances by Cutting Costly Expenses

E stands for Eliminate

Starring Christian Bale, Hugh Jackman, and Michael Cane, the 2006 movie, The Prestige, explores the dark side of a magician’s commitment to his or her art. Without getting into the twisting, surprising and sometimes even gruesome plot, suffice to say that each of the starring magicians spend their energies and their lives trying to make things disappear in a more unbelievable and dramatic fashion than the other. Michael Cane’s character describes three components of a magic trick. I acknowledge that the terminology he uses was invented just for this movie, but it applies perfectly to this subject.

First, the “Pledge,” when the magician introduces the audience to an object or situation accepted as unremarkable or generally normal.

The second part of the trick is the “Turn,” where the magician is able to make the audience believe that the object has disappeared in some impossible way. The Turn may take only an instant or it may last the entire show.

Finally, the last part of the trick is to bring the object to its original or improved (but always recognizable) form of existence. This, Cane’s character says, is known as the “Prestige.”

When managing your household finances, it can certainly feel like you need more than a mere Pledge to eliminate your debt and Turn it into savings and investments of some Prestige. You might personally feel that you have to be a magician, requiring secret knowledge, to succeed. The reality is that you need to move from seeing yourself in the audience at your own show to becoming the magician on your own stage. Let us see how this might look as steps in a magic trick.

First, the Pledge. It should be easy to determine what your object in question is. When it comes to eliminating things from your finances, you can choose unnecessary expenses or plain ol’ debt. We will use debt for today’s show. As part of the Pledge, magicians have the audience verify the object is genuine. That is far too easily done where debt is concerned. You can simply log on to your account or call your lender to confirm current status, balance, and possibly the payoff amount. Your trick, you see, will be to make the debt disappear, like magic.

Like in a magic show, it seems that the most difficult part is making the object disappear. This is the Turn. Making debt disappear is not magic. It may appear as magic to those who think you have to win the lottery or inherit a fortune to get rid of debt. Such beliefs are akin to fairy-tales, though. If you think that paying off debt is dependent upon earning or receiving more money, you will NEVER be out of debt. Human nature has a few tricks of its own up its sleeve. You see, the reality for most of us is that the more money we make, the more money we must spend. And we are willing dupes in this show.

Making debt disappear (the Turn) can be done in one or more of only four ways:

Those who want to cut debt from their expenses can use one of four popular methods.1) Eliminate your debt on your own by paying at least the minimum amount due – although more is always better – and working with your creditor(s) to lower their interest rate;

2) Eliminate your debt by working with a nonprofit credit counseling agency to consolidate your payment, pay off your debts at lower interest rates, and be debt free in five years or less with no indication you were ever on such a program;

3) Eliminate your debt by offering your creditors less than you owe in hopes that they will settle for that lesser amount; or

4) Eliminate your debt filing for bankruptcy.

Each method has its advantages – which decrease from number one through number four – and their disadvantages – which conversely increase.

Finally comes the “Prestige.” First, a question: would you want to make your debts disappear only to have them reappear exactly as before after working so hard to get rid of them? No, of course, you wouldn’t. Unfortunately, many people do this exact trick. Think about people who pay off their car loan only to turn around and make it reappear as a new car loan. Other households finally pay off a vacation credit card bill only to turn around to put another vacation on their credit card. Such make for pretty disappointing versions of the Prestige.

Instead, for a great trick, the money you were spending on all of that debt should reappear in new and improved and more beautiful forms, including homeownership, a retirement nest egg, greater cash flow for future travel and other experiences, as well as a growing emergency fund that promotes greater peace of mind and healthier sleep habits.

Now that’s a trick I want to fall for! But how?

Here are the three keys to such a successful financial magic trick:

    1. You must be willing to suspend the twin beliefs that you will always be in debt and that debt is a normal part of your life. Instead, picture yourself, five to ten years in the future, enjoying life without any debt at all. Ask your current self how different your future self will feel compared to your current self. You have to buy into the idea that such a magical event and such magical feelings can truly happen. Otherwise, you will remain in debt – and probably even increase your debt – forever.
    2. Eliminate your superfluous spending. Spending mindLESSly grows your debt. Spending mindFULLy increases your power to work magic. Therefore, you must have a spending. No magician approaches a new trick without careful planning. If you have tried unsuccessfully to budget before, perhaps you need a different plan. Go back to S Stands for Spend to review a few options available for your spending plan.
    3. Practice, practice, practice. Every good magician (and every successfully household financial manager) knows that repeated effort, regular adjustments, and a consistent belief in your eventual ability to succeed are needed for a great magic trick.

Armed with these three keys and an understanding of the steps in all great financial magic tricks, you are now ready to perform what has seemed miraculous to previous versions of yourself. So, are you ready to get started? It is time for your Pledge.

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