Thursday, February 27, 2014

Thrifty Thursday-Living Debt Free

 Most folks who are debt-free have to work at it.
But the freedom it offers is well worth it.
There are some practical ideas that
can help you get there too.
This recent news article caught my eye
and I thought it worthy of passing on.
You can find the whole article here.



Whether you’ve resolved to get debt-free in 2014 or you have a long way to go, it’s good to be inspired. Look at people you know who are already living debt-free lives. 
Whether it’s a friend, family member or co-worker, the person you are thinking of probably shares similar qualities with other debt-free people. 
Here are 10 common characteristics you can copy to live within your means.

1. They Pay Attention to Details
You won’t notice that recurring fee on your credit card for the gym you’ve stopped using if you’re not checking your statement regularly. People without debt monitor their personal finances closely. They are less likely to waste money by forgetting about payment due dates or overdraft fees.
 Try looking at your credit card statements every month. Next monitor all of your spending. Now add up your income. Compare the two and see where you could cut back.  
Revisit this a few times a year to stay on track.

2. They Know Their Stuff
Debt-free people do their own research. They might have an accountant, but they don’t send over paperwork or sign their taxes without looking them over. If you want control over your finances, you need to learn about them. It may feel overwhelming, but the sense of security you will feel in understanding what’s happening with your money will outweigh the discomfort.


3. They Pretend They Make Less
Even if you are already deep in debt, you can start to improve your situation by immediately changing the way you look at your money. Imagine you make 10%, 25% or even 50% less than you do.  Make a budget using that math. It may be impossible at first, but start making cuts to your spending.
Debt-free people live on less than they make. 
This allows them to put money aside for buying a house, retirement and an emergency fund. 
This provides a financial independence that allows you more options in the future.

4. They Think Long Term
When the focus isn’t on immediate gratification, you can make smarter decisions. Sure, it would be nice to have this season’s hottest shoes, but how will they help your long-term financial goals? This doesn’t mean you can’t ever buy shoes. It just means you have to save up before you buy them. This also gives you the time to consider if you really even like the shoes and avoid impulse purchases.

5. They Aren’t Afraid to Ask
Ask for help. Ask for lower interest rates. Ask for forgiveness when they make one late payment.  If you know someone who has met a financial milestone you admire (saved $1 million for retirement, bought a car in cash, etc.), don’t be afraid to ask how they did it.
*We have experience with this idea.  Just calling a company
to ask if the late fee can be waved really works if your overall credit is in good standing.

6. They Save
Whether you got a significant bonus or a $25 check from Grandma, you should think first of paying yourself. This is true of your regular paycheck as well. You know you have to pay the rent (or mortgage), so treat your savings account the same way. Make it a habit. 
And better yet, make it a mindless habit by setting up automatic deposit. 
Debt-free people know adding even small amounts now will give you more financial freedom later.

7. They Set Goals
You’ll find it easier to put aside money if you have a strong sense of what it’s going toward. This works for when you are saving up for those shoes, planning a vacation  or thinking about retirement. Debt-free people set specific goals so they know what they are striving for. This helps you stay on track. Think about what sounds appealing about retirement. If it’s travel, imagine the places you will visit. 
Now the goal seems more specific.

8. They Say No
You may get lots of tempting offers throughout the week for lunch with co-workers or dinner with friends. Don’t be afraid to say no. Debt-free people know that saying no to smaller expenses can add up to big savings. This doesn’t mean you can’t have any fun. 
Host a potluck dinner instead of trying out the new, expensive restaurant. 
Meet up with friends in the park for a walk instead of taking an expensive exercise class.
**This is simple to do.  Staying focused on goals makes it easy to avoid "keeping up with the Joneses".
We just don't feel that temptation.

9. They Know the Value of Cash
Debt-free people know the value of a dollar… because they see it! It can be easy to overspend when you are never seeing actual money. Having to part with some cash can remind you the transaction you are making is real. Plus, once that cash is gone, it’s gone. 
Try only using cash for a while and see how it changes your perception of purchasing.

***10. They Value Experiences Over Stuff
Debt-free people aren’t focused on things. They value experiences more than having the latest things. The average person will list family and friends high on what they value.
To become debt-free, you are going to have to shed some of your current bad habits and take on some new, more constructive ones. Use the people who already living debt free as inspiration.
***This is the item that's been easiest for us to follow.
We'd rather make a memory than buy more stuff.
Just say no to commercialism.  
Less to keep track of, less to maintain, less to clean, less to upgrade. 

It's still early enough in the year to make changes.
If you want to get out of debt, or avoid acquiring it,
put conscious effort into your choices.



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16 comments:

  1. I have always been debt free so it is hard for me to understand how people get into debt but I think that everything you just described above is my natural personality so I guess I was really lucky! We live on less then we make and we do a good job of living with what we have. People think that doing without the newest of everything is something of a sacrifice but you don't need a new sweater if you did in that closet and find an old sweater that you haven't worn in awhile. I wish everyone the best staying or getting debt free and I think that these are some great ideas to help!!!

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    1. Good for you being debt free! It gives one a feeling of contentment to know that what we have is enough. ;0)

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  2. Such a great post! It's sooooooo hard to get into the mindset if it's new to you {and takes some self-reminders - often} but you are right, so worth it. I love the "say no". It's hard to see the small cents and dollars here and there really do add up.

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    1. It's amazing how quickly they do add up! ;0D

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  3. Daisy, most people can glean great advise from all the points you have brought up for discussion. I admire those that can live a debt free life and stay that way. My journey through life did not allow me to take a path of no debt. First off when a complete life style change is made after a few years of marriage, the spouse better be willing to make the change not just for a month or even a year but forever. Mine was not. So the decision was do I live in a stress filled relationship that possibly could end the marriage or do I continue on trying to save and cutback the best I can. I chose her. Then there's her health issues that became more and more prevalent during the last decade of her life. It buried us in debt which made it necessary to keep taking equity from the house as it increased in value to pay for medical bills. Currently, I'm trying to get my youngest daughter started in life, helping to raise a grandson, and providing financial help for an aging mother in law. All of these issues prevent being debt free.

    I say all of this not to wine and cry about how bad I have it because I feel richly blessed to be able to make a difference in my family's lives. Yes, I would like to be debt free but there were, in my humble opinion, choices that I didn't want to make just to be debt free and I don't regret them. I still have a hope that before I leave this world my tab with be paid in full. At the rate I'm going, I'll only be 91 when it happens. I'm having a big celebration with motorized wheel chair races up and down my street. Wanna come? :-)

    Have a great debt free day.

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    1. The article's not mine, I'm just passing it on.
      Your family is blessed to have you.

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  4. It really is so important to look at your long-term goals and see how your income and expenses match up. Many people are scared to look closely at their finances because they are in disarray, but taking a good hard look is the only way to know where to start and turn it around! A lot of people I know are struggling with student loan debt right now. It can be so expensive to get a good education.

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  5. Great list Daisy! All so true :) We just have the mortgage really, but we look forward to eagerly to the day when it is gone too! We've been contemplating moving to a smaller/cheaper place/property, simply so that we can pay cash and be out of debt NOW. We're trying to figure out what our next goals are though, before we fully commit to that, as there will be implications of doing so on other aspects of our lives (quality of school district, commute time, etc), and we want to balance everything out. We need to figure out the next step after that before we can decide. :)

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    1. As I said, the list isn't mine, I'm just passing along the good stuff I find.
      I know you'll figure out what works best for your family. You'll make the most out of being debt-free!

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  6. Great post, Daisy! Finances can be a tricky topic for a lot of folks. I think the part where you said 'shed some of your current bad habits and take on some new' is good advice.

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    1. I found this article and am just passing it on, so I can't take credit for it. I do think that is good advice though!

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  7. Great article. It's amazing the freedom you feel when you are debt free! Thanks for sharing on the HomeAcre Hop, hope to see you again tomorrow! - Nancy The Home Acre Hop

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  8. Living debt free is not an easy thing to achieve. I'm sure people who are living that lifestyle have already gone through living in debt before, which is why they took the sudden leap to step up. Anyway, I completely agree with you that keeping the lifestyle to living debt free can also be a huge challenge once you attain it. I also agree with you that people who have attained that lifestyle are now re-wiring their brains to think that they make less in order to spend less. Kudos to you and your informative list, Daisy! Thanks for sharing! :)

    Herman Thompson @ AccountAbility Plus

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    1. Life is so much simpler if you can work toward being debt-free. Thanks for visiting!

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Thanks for taking the time to leave your thoughts!