Why Living Debt-Free Creates a More Joyous Life

I know so many people who portray themselves as happy on Facebook, that I can see are not very happy at all.  People are keeping up with the Joneses, piling up credit card debt, feeling the pressure of impending college tuition, wondering how in the world did I get in this much debt and how am I going to get out of this? They work jobs they abhor and live lives that are severely disorganized.

101My challenge has always been to push people to challenge themselves, to break the cycle of a life that is designing them vs them designing their life. And as I type this I realize some might read and say most people’s lives aren’t that bad; and my response is you have not been paying attention.  It might be the case that not all families encapsulate my description above, but many families deal with a few.  I believe we have been conditioned to accept debt as a reality, when in fact it is a defeatist mentality.

We must realize that our life is our responsibility and it is possible for us to make positive changes.

I have talked often in the past about debt and I have wondered myself why so many of my thoughts regarding living out dreams come back to debt.  And I guess the answer is that in conversations with people I have heard the money excuse used all too often. And when I hear the money excuse used I immediately wonder how much cash they waste each month or how they use their money.

I personally have two resources that I guard as sacred: my time and my money.  The money situation is very sensitive for lots of individuals because they feel a sense of embarrassment when light is shined on their inability to manage their personal life. If you speak to someone who works in the financial business they will tell you how defensive people get when their debt is criticized (and by criticize I mean it in the truest definition of the word, not pointing out flaws or making fun of).

I believe it is important for you to understand one fact: your debt could be getting in the way of you living a fulfilled life!  We live in a society that tells us we must live in a certain type of house, drive a certain type of car,  send our kids to a top school, we must work a certain type of job, we must associate with a certain type of people. And if you do not you are not successful. And you must obtain these things at any cost. So get yourself some credit cards, acquire a line of credit and go buy things so that people think you are successful and these things will make you happy and fulfilled.

And in the end what you have attained is a life that is fake, that you don’t own because you owe others for it, and a mountain of debt that you carry around like a 300 pound gorilla each and every day. Your debt restricts your ability to move out of a job that makes you unhappy, it restricts your ability to move out of a city or town that you do not like, it restricts your ability to see the world around you and it sets an image of the type of life your children expect to have for themselves.

For your information, Warren Buffett still lives in a house in Nebraska that he bought 50 years ago and drives an old Buick,  both of which he paid off many years ago.

121908-600x349Do not wait for tomorrow, do it today!  And contrary to what some might say Starbucks is not necessary. Car payments are not necessary. Shopping at the most expensive grocery stores is not necessary. Eating out is not necessary. Gym memberships are not necessary.  Boats & motorcycles are not necessary. Cable television is not necessary. And these are just a few of the things I see people spending money on that they can neither afford nor sustain.

Your attitude towards buying things should always be: if you do not have the cash to buy, do not buy it.  I will guarantee you if you eliminate all unnecessary spending each month you will have approximately $500 to pay on debt. My advice would be to pay down the smallest credit card first and gain some positive forward momentum. Then choose the second debt item and take the $500 plus whatever you were paying on the first credit card and pay that on the second credit card.  You duplicate this formula as many times as it takes to get you out of debt and if you commit three to five years to this you will be 100% debt free.  There are many methods or plans that one can use so be sure to educate yourself as to the best method for your situation.

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Many of the happiest people I know have extremely low debt. And by extremely low debt I mean they have an affordable mortgage, no car payment, and zero credit card debt.

Successful people do not stumble upon being successful. Their lives are purposely designed to give themselves the best opportunity possible to find success. And it is time for you to take control of your life and design it to give yourself the best opportunity possible to be successful.  The first step is acknowledging that your life is your responsibility.


Escaping the debt trap

I wanted to share this quick thought with you folk regarding debt…

thabo's journal

Can we live without debt?
Most people believe we can’t live without debt. There are people who never had a credit card in their lives, don’t have a retail clothing card and don’t owe anybody anything. How do they survive?

Is it a personal (image) thing?
Getting into debt to maintain a lifestyle is called ‘bad debt’ while a lot can be said about good debt. Why keep an image you can’t afford?

I came across this statement…

“Corruption thrives in countries with higher inflation rate”

Whether this is true or not, I don’t know. These days, everybody is in debt; the trick is to manage it.

Three rules to get wealthy
1. Earn more.
2. Spend less.
3. Invest, invest, invest!

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How Being Debt-Free Can Improve You Emotionally!

photo 1Today’s discussion has revolved around the importance of obtaining financial freedom.  It has more than just financial benefits.  Those achieving this freedom report less stress, improved relationships and other emotional improvements.  Read this article on The Art of Simple:


Getting into (Financial) Shape

How many of us need to stop and reevaluate how we spend our money? How many of us are tied to material things? How many of us are allowing the desire for material things to ruin our lives financially?

The American Rider

That’s it. I’m putting my foot down. I’m drawing the line in the sand and saying enough is enough.

It’s been too many sleepless nights and gut-wrenching mornings wondering where the money for the next bill is coming from. It’s too many days avoiding my bank accounts because I’m not sure what I’ll find. It’s too many poor decisions of taking on debt with the justification that, “Just a little bit more” won’t break the bank.

It has broken the bank. It’s broken me.

My watershed moment came from looking through jobs that were available in my area and the ones that I have saved over the months on Indeed.com and Monster.com. All of them were the same schtick: Media content jobs, web development/management, social-media engagement. All of them were left in that “saved jobs” folder untouched. Why? Because the income potential was low and my debt burden is…

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4632 Reasons to Share Your Link!

cf02f0ea8220c6ce99764a33d0241622Today’s theme is living a debt-free life; one of the 4 Pillars of Successful Living.   As I mentioned last week I will be using reblogs to reinforce the daily topic.  Do you have a post relating to debt, debt-free living, personal finances, credit card debt, etc.??  If so, leave the link in the comments and I will share with everyone to aid in our discussion!

First Steps to a Debt Free Life

Debt freedom can be achieved with hard work, dedication and sacrifice. Trust me, the deferred gratification is worth it in the end!

Candyfloss & Dreams

I used to be 18 and really stupid. I thought credit cards were free money. I didn’t get the impact of cancelling direct debits on things that I actually needed to pay for and I have been paying for those choices for the last six years. That’s a long time to deal with debt. When I first started working full time again I took some drastic steps into paying larger amounts on my debts to get the costs down and I paid of a few of the smaller ones after about a year of this because I could afford to do so.

When I first moved into my flat I had no money, a terrible credit rating and basically no furniture so I had to start from scratch. Now, I did get a lot of help with family which was lovely. But taking care of the credit rating and the…

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Debt Be Gone

If you have mounting debt, it is time for you to address the problem, make cuts and relieve yourself of this spirit-killing burden!!!

The Budgetology

When you’re getting out of debt, no matter how long it takes, it’s hell. Straight up. You just will not be able to live the life you were once accustomed to…you know…the life that, oh, I don’t know…got you into debt in the first place? Hmmm? Moving on…

When getting out of debt your first question should be: what am I spending my hard earned cash on that I shouldn’t be spending it on? You will find there are probably a lot of things in the month that suck up your money.

There are a few things besides your expensive morning coffee you should consider getting rid of immediately like:

  1. Your gym membership — anywhere from $30-$60 a month and you really don’t need it. Bust out that dusty elliptical, go for walks and runs or swim in your pool. Heck, even look up free YouTube tutorials on how to…

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Living Within Your Means

The second item on the list of Habits of Successful People is: they live within their financial means.  Statistically they allot 25% of their income to housing, rent or mortgage.  15% to food.  10% to entertainment.  And 5% of their net annual to holidays/vacations.  I can tell you from my wife’s previous occupation of financial consulting, that the vast majority of people do not live within their means.

A Huffington Post poll revealed that only 10% of Americans are living below their means or spending less than they make.  Why is this so and why is it important?

Successful people guard two things with serious conviction: time and money.  They understand the importance of financial responsibility and freedom.  When I first started writing the Dream Big blog I was not sure where I wanted to go with my writing, but that was clarified for me when I compiled the list we are working through now.

In the U.S. people make one fatal financial mistake: they fall for the lie that everyone has to have credit cards.  We are led to believe that it is normal and okay to accrue credit card debt, which leads most down a destructive road.  I have written about this topic a lot and learned that the average credit card debt per household in the U.S. is just under $15,000.

c92470c3e7607e72fa3a9405066e4a5dSo why is living in your means important?  When you spend less than you make and do not rack up debt, you allow yourself freedom and mobility.  What I mean is you have the freedom to switch jobs or occupations if your current situation makes you unhappy or unfulfilled!  So many people I speak with about starting their own business or changing jobs simply cannot take a job making less money because they owe so much money; they have massive debt.

So what do you do if you have stacked up huge debt?  You must begin immediately assessing the damage and take action to pay the debt off.  I recommend making serious sacrifices for a couple of years in order to pay down credit card debt.

My list of recommended cuts are as such:

  • Pay television, cable, satellite,  internet based.  The average pay television bill in the U.S. is $123!!  And most shows can be streamed for free!  Plus there are better things to do with your time.  Just sayin.   Estimated savings per month (ESPM)… $123
  • Shopping at premier stores.  Swallow your pride and start bargain hunting!   Marshall’s, TJ Max and even thrift stores are great ways to get what you need at a fraction of the cost.  ESPM…$100
  • Stop smoking and drinking.  Not only is this good for your budget your lungs and liver will both thank you!   ESPM…$150
  • Eliminate eating out.  Look at eating out as a luxury, one that you can no longer afford!  For special occasions find a nice, inexpensive spot to dine.  My wife and I found a great Chinese restaurant that we can both eat for under $20.  ESPM…$100
  • Elaborate entertainment.  If you have credit card debt I can safely surmise that a large percentage of the balance is due to entertainment you could not afford in the first place.  Get creative when planning family entertainment: go to the park, rent a DVD from Red Box and have family movie night, attend a free music fest.  Entertainment does not have to be a $100+ night at the theater.   ESPM… $200
  • Starbucks or coffee-house.  This is a personal peeve of mine as I know lots of folk that have a $70+ coffee habit each month.  Buy a good $9 bag of coffee and brew at home.  ESPM… $50
  • Memberships.  Gyms are the worst investment known to every financial counselor.  Every one of them had this at the top of their lists.  Buy your own weights, run outside and stop wasting $75 each month.  ESPM… $75
  • Magazine subscriptions.  No explanation needed.  ESPM… $20
  • Car payments.  If you have more than 1 car payment, you are handling your money foolishly.  Automobiles depreciate.  One financial advisor said to me, “finance assets that appreciate, but never finance assets that depreciate.”   Rework your current auto situation and eliminate 1 or more car payments!
    ESPM… $350
  • Name brand groceries.  I shop at Aldi and love it.  My wife is amazed at what we get for the money.  ESPM… $200
  • Misc. waste.  Most people have a couple hundred dollars each month that simply vanishes.  Well, find it!  Keep all your receipts for a month and identify any holes in your ship.  ESPM… $150

Once you have eliminated unnecessary spending take the surplus and combine it with your minimum payment on your lowest credit card debt.  Imagine how quickly you could pay off $5,000 if you were paying $600 to $1000 per month!  Once you have paid off the first card, apply your total payment from card 1 plus the minimum from card 2 and hammer that debt down.  You proceed in this fashion until you have paid your credit card debt off.

I have talked via email with a few people who decided to pay themselves out of debt.  They all said the sacrifice was so worth the freedom and relief they felt once the debt was paid off.  I strongly encourage you to take a look at your finances.  Do not tell me you cannot find extra money because I know most people can.

Make a short-term sacrifice for a long-term gain.  You will thank yourself!

Big Dreamer

True Debt Story

This article touches on many of the debt resolution ideas I have talked about here on Dream Big.  But, I thought it would be nice to hear from someone that actually executed the plan: cut expenses, generate more revenue.  Paying off credit card debt is not as insurmountable as you make it in your mind IF you follow the plan.  If you do not, then you will continue to worry about it and nothing will change.  Once again, beating that dead horse, see Financial Freedom.


image credit: Dana Burgess

image credit:
Dana Burgess




Big Dreamer