Is It A Problem Or A Crisis?
One of the ways that debt free people stay that way is by knowing the difference between a want and a need and between a problem and a crisis. Wants can be set aside, while needs must be resolved, although they may also be bargained for in order to get what’s needed.
As for problems versus crises, the key question that debt free people ask is “am I in over my head?” If so, you’ve got a crisis on your hands and you probably shouldn’t handle the situation yourself. Paying a professional to do something you can’t do proficiently on your own will save money in the long run. Trying to resolve a crisis on your own will instead result in spending money on things you don’t need and wasting time on something you can’t do.
Rethink Your Paycheck
Debt free people think differently about getting paid than the rest of us doing. Most centrally, they don’t see getting paid as what happens when their check from work arrives, but rather as something they have to actively participate in. Just like you put money towards a bill, you also put money towards yourself in the form of savings. If you do this consistently with every amount of money you receive – your check from work or Christmas money from your parents – you’ll find that nest egg grows rapidly.
Focus On Independence
Being in debt can make it feel like someone or something else owns you – the bank that holds your mortgage, the car company you’re leasing a vehicle from, or those credit cards that loom every month. It’s stressful and can keep you from doing the things you want to do. Debt free people don’t have to live like that – they focus on freedom and experiences over items. They don’t have to plan their lives around the need to pay off debt.
Imagine You Have Less
If you really want to reduce your spending, one of the most important lessons you can take from debt free people is the practice of budgeting around less money than you actually have. Look at your income and then reduce it. Base your new budget on this reduced amount. This can feel hard at first and you’ll be tempted to spend some of that money you’re not accounting for, but do your best to resist. This is where your finances can change dramatically.
Ultimately, the road to debt free living is paved with hard work and determination. The key to reducing your debt isn’t making more money, but rethinking what you need and how you’ll pay for it. When you realize you can live with less, you begin to change your life in the direction of your debt free dreams.