Everyone has debt… at least that is how it feels. Cars, Boats, College Degrees, Vacations, Weddings, Engagement Rings and on and on. Without loans none of that is possible or at least not realistic, right?
Wrong. We are proof. I am not going to tell you how we lived in a motor home for 5 years to make it happen either. (Though that is an option and it could be fun for a while) Instead I want to share our story and some simple steps that may inspire you to live the loan free life.
This isn’t just about how to avoid debt. It’s about pursuing a better life, better relationships, and chasing down your dreams.
Now I have to be upfront. We have a mortgage, which is why “debt free” is not what I titled this story. Part of this journey is about tackling our mortgage as soon as possible too. But instead “NO LOANS” meaning paid for Cars, College Degrees, Engagement Rings, Vacations, and all the rest.
Living that type of lifestyle is so opposite in our culture. 150+ million Americans have credit card debt to pay off. Of those qualified to have a credit card that is over 60% of us. 44+ million have student loan debt.
About a third of us cannot cover an unexpected $500 expense. And virtually half report being fearful about their financial wellbeing. HALF! That means that when you go to work or school or church or the grocery store, half of the people you see are currently fearful about their financial wellbeing.
We do a great job hiding it in public most of the time. But it affects our relationships, our attitude, our hopes and our dreams. We want something better but most of us don’t know how to get it. This is just how most everyone lives. Paycheck to paycheck with no end in sight.
Today is the day you break that cycle. There is a better life out there that includes freedom.
Here is how we did it:
1: Commit to stop accumulating debt right now. If you can’t buy it with cash you can’t afford it. It wasn’t all that long ago when this was how everyone lived. You saved up and then you bought whatever it was that you wanted.
We decided that in order to win with money and to grow a healthy marriage we had to reject debt as a way of life. Debt is an anchor not only to your finical wellbeing but your emotional and, I would argue, physical wellbeing as well.
If living without debt seems difficult to you here is my question; Are you happy and fulfilled with your financial life and its impact on your relationships right now? If the answer is “No,” wouldn’t your happiness be worth temporarily delaying buying that next new thing to get it? If you had to drive a used car for a while or wait a few years to get the newest generation cell phone but you were free from debt wouldn’t that be worth it? Would the positive impact on your relationships be worth it? Absolutely!
2: Make a plan. Every month we write out a budget, we talk about it, we agree to it. We aren’t perfect and sometimes things come up, but we keep the conversation alive and we adjust. If you want to improve the relationship with your significant other DRASTICALLY, start talking about money openly. Make a plan together and agree to it.
Someone out there is scared by this… that is normal. When you start to talk about money old wounds get brought up, old mistakes, maybe some secrets that really shouldn’t be secrets. Guess what, healthy relationships involve getting things out in the open and working through them. The process might be messy but the payoff will be huge. Relationships are built on trust and mutual respect. If you want to foster that, then money conversations are a great place to start.
I said we aren’t perfect. That is true, we still get in arguments about money sometimes. But those conversations lead to healing and deeper trust instead of resentment and further secrets.
Making your plan will be hard at first. Don’t give up, keep the conversation going, adjust, forgive, and you will get better at it. It’s hard because you haven’t done it before or because when you tried last time you gave up.
Don’t give up! Take a step forward every day, you will get there. I know because we made it. And if you need help reach out, I would be happy to help get you started.
3: Save Up. Debt and money stress is mostly the result of not looking ahead. I know that I will need new tires in the next five years. I know that you will too. Most of us walk out one morning, usually in the winter, and notice that our tires are bald, this happened to me a few years back. I got a quote and then almost had a heart attack when I saw that it would cost $750.
So here is my question; What are you doing about it right now?
You know you need tires. You will have to pay for them. You will either have the cash ready or you will stress out, put it on a card, take some time to pay it off with interest and repeat the process in 5 years or so.
Tires aren’t the only thing like this, they are just a good example. But what about a furnace, water heater, dishwasher, other car repairs, medical bills, etc? Those bills are coming, you know it and I know it because we have paid them.
Here is what we did… First, we built an emergency fund, which is a must. Here is another post devoted to just that, but by building an emergency fund a few things happened. First our financial stress level went WAY down. If an emergency happens we are ready. When my wife had emergency surgery several years ago and the hospital bills came in, we were ready. We focused on getting her well, not how we were going to afford it. Money stress on top of medical stress is not a good combination.
An emergency fund will change your life.
Second, we started saving for things we knew were coming. The emergency fund was there if the refrigerator randomly stopped, but we knew we needed new tires in five years, so $750 divided by 5 years, divided by 12 months is… $12.50 per month. There are a few items like this, we added them all up and every month our savings account automatically pulls over the total amount.
Next time I need new tires I have the cash and zero stress.
4: Invest In Your Future. Investing is a topic I love to write about because it is so powerful. When it comes to winning with money long term there is no other way to WIN BIG.
When you start to invest in your future something changes in you. Instead of focusing on right now you develop a vision for what could be, what will be, in the future. When we live paycheck to paycheck we can only focus on right now. That mentality crushes our ability to dream.
Investing for the long term opens up that ability. It allows you to dream of something bigger than today. Imagine the impact this has on your thought process and your relationships. Imagine if you start to dream together in a relationship vs. just focusing on how you can get through the week.
When you know you are taking care of your future it inspires you to more right now.
5: Give. (Don’t stop reading, I’m not asking for your money.) But this is a very serious point. Giving is about someone or something else and not about you. When your money is all about you it becomes toxic.
You know this is true because you have felt it in yourself or you have seen someone else who emits a sense of selfishness. Nothing is worse for relationships than selfishness. Nothing is better than selflessness. If you can be selfless with your money then you will be selfless in your life.
My wife and I care deeply about several causes. I am willing to bet you do too. Take 10 minutes to do some research, find out who makes an impact in that area and start giving. Or just give to someone you know needs it, no strings attached.
This is about selflessness, not selfishness. The goal is not to give and get a bunch of credit for it; that is still selfishness. Give without expecting anything in return and give without seeking credit. This will change your life.
In your financial journey there will be times when you can give a little and times when you can give a lot. But no matter where you are at financially, find ways to give. The act will change your life and your relationships.
Conclusion: Debt Freedom removes the weight, a Plan gives you control, Saving eliminates the fear, Investing allows you to dream, and Giving makes you begin to live selflessly.
This isn’t just about living without loans. Hopefully you caught that. It’s about choosing to live a different kind of life. We don’t have it all figured out. But we are working on it. The choice to live this way is one I would never change because it is a life that promotes trust in each other, inspires us to dream for our future, and enables us to live selflessly.
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