Living Debt Free

There seems to be a belief today that in order to get by, you have to get into debt at some time or another. This is actually untrue. The reason most people enter into debt is because the alternative seems to be a fairly boring life, or because they want (and think they deserve) to have everything now instead of saving for purchases and paying cash.

Well, that belief is false. In fact, I would go so far as to say that it’s a carefully crafted, nurtured and promoted lie that allows banks, credit card and loan companies to get rich off of people who just can’t wait to have it all.

Not only is it possible to live life debt free, but it is actually better for you to live debt free not only in the long term, but in the short term too.  If you follow some rules, you will find that living debt free comes with benefits:

  • you won’t have to do without anything you need
  • you won’t have to deal with the stress that comes along with being in debt
  • you will find a way to get the things you truly want
  • when you are ready to retire, you’ll retire far better off than those who had to have it all right now

The funny thing about debt is, we think we can manage it, but if an emergency comes (which they have an irritating habit of doing at the worst possible moment!), that manageable debt can suddenly spiral out of control. Knowing that you can live a life without debt collectors writing, calling and even knocking on your door really makes a difference.

So, what does it take to live debt free? You’ll have to make and stick to a budget, or as I like to call it, a spending plan. This may sound dull, but when you think about the alternatives it is something worth doing. And really, if you make that mind shift from a budget that limits what you can spend to a spending plan that simply plans in advance where you will spend, it makes a huge difference in your mental attitude and your ability to stick with it!

You start by writing down your monthly income. Then, write down what you will need to spend that month. I always start with tithe and savings (pay yourself first), then food, rent or mortgage, gasoline, electricity, telephone and other necessities. These are your fixed expenses. What you have left over is disposable income. This is how you pay for entertainment, dining out,all of those things you want, but don’t really need.

By doing this monthly you will get a grip on where you are overspending and where you can cut back in order to change you priorities and redirect your spending.  You don’t have to suffer to stay debt free. You can still treat yourself or others, you will just do it reasonably and consciously when you have a spending plan.  In fact, without monthly credit card bills, you’ll have even more money to do give, save and spend each month. It is a much more peaceful way to live.

 

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