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Make Debt-Free Living Your Top Financial Priority

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Tuesday, May 07, 2024

One of the many secrets of success great minds like P.T. Barnum can teach us is to avoid the burden excessive debt carries. Financial freedom is priceless.

​Debt is a vicious trap that can hold you in its snares. Your attempts to fight back could get you even more caught up if you continue to borrow to pay off what you’ve already borrowed. The only thing to do is to work vigilantly to pry away each toothy point of the trap. Let’s examine why debt-free living should be your top financial goal, how to avoid debt, and how to get out of it.


Why It’s Important to Be Debt-Free

Some debts are strategic and beneficial, like student loans and a mortgage. However, there comes a point when the scale starts to tip towards harmful, even with strategic debt. For example, you need a home, but how big and beautiful of a house do you require? Can you live below your means if it means saving more money?

Many Americans are familiar with debt. Getting a home, car, or college education without it is challenging. However, mounting consumer debt on nice-to-haves, like a giant house, causes more harm than good, and that's the kind of debt we'll focus on.

​Debt binds you to the creditors and decreases your freedoms. It blocks your access to life, liberty, and the pursuit of happiness. Consider the following impacts of owing more than you can handle:

  • Your income isn’t yours. It goes towards debt.
  • ​You borrow more to pay off what you owe and get stuck in a vicious cascade of debt.
  • ​You end up stuck in a job you hate because you need the money, insurance, etc.
  • ​You can’t travel.
  • ​You can’t retire when you want.
  • You can’t buy the home or vehicle you need or want.
  • ​You can’t get a loan to pursue your business idea.
  • You can’t pursue philanthropic endeavors.
  • ​Your debt affects your children’s education and bank accounts, and they start their financial adulthood behind the curve.
  • You are stuck in a cycle of depression, isolation, helplessness, and overwhelm.

5 Tips for Living Debt-Free

The pursuit of debt-free living should rank high on your list for living a fulfilling life. Let’s discuss some tips to avoid debt and get out of it if you’re already in it.


1. Learn to Be Content

Author Napoleon Hill warns us against spending more than we earn in “The Keys of Success.”

FOMO (fear of missing out), keeping up with the Joneses, and feeling entitled to “treat yo’self” can propel you to spend money you don’t have. You are living beyond your means when you purchase a lavish vacation, fancy dinner, or the latest electronic gadget on credit with no plans to pay the debt off within a month. You’re trying to buy happiness and compounding what you owe.

Happiness doesn't come from things. Happiness comes from pursuing worthwhile ambitions and being content with what you have. If we look around, most of us can admit we have a lot to be thankful for. We must recognize our blessings to prevent overspending. Start a gratitude journal. Write down at least five things you are thankful for every day. You'll realize many of your needs and desires are met.

​Get your priorities straight–love people and use things, not vice versa. Find a need in society and create a worthwhile goal to pursue it and help others.


2. Start an Emergency Fund

Open a savings account at a bank and begin saving what money you can. Ideally, work up to six months of your salary. Of course, you won't get there all at once, but a little bit is better than nothing.

​It helps to write out a budget. Start with your monthly income. Then, subtract your monthly bills (internet, cell phone, groceries, gas, etc.). Any leftover money should go towards building your emergency fund. If your bills add up to more than your income, consider what expenses you can cut. For example, do you really need all the different streaming subscriptions? Also, consider taking on another job to supplement your primary income.


3. Pay Off High-Interest Debt

Pay down the account with the highest interest rate first. Put any extra money you can toward your highest-interest debt after paying the minimum payments on all other lines of credit (credit cards, loans, etc). Move on to the account with the next highest interest rate after paying off the first. Since interest charges can drastically add up over time, you’ll limit the total interest you pay.

​To put this into perspective, let's say one credit card company charges you 17% on unpaid amounts. Paying that debt off automatically earns you 17% more money from your paycheck. That's like getting a 17% pay raise at work or making 17% interest in a savings account–an unheard-of amount.


4. Gamify Thriftiness

Turn savings into a game. Look for cheaper alternatives to things you need. You win anytime you avoid unnecessary expenses, like a $4 coffee drink.


5. Get Professional Help

You don’t have to face your debt alone. Debt counseling services are available and free through services like American Consumer Credit Counseling in FINRED (military). They can help you renegotiate and reduce your debts with creditors, consolidate loans to save on interest, and create payment plans based on your income.


Aim to Live Debt-Free

Don't let debt hold you back and rob you of your freedom of life, liberty, and the pursuit of happiness. Avoid living beyond your means. If debt has already ensnared you, it isn't too late to change your circumstances.

Carefully consider what debt you take on. It needs to make financial sense. Freedom from debt means pursuing what you truly want out of life–family, travel, creativity, philanthropy.

​Want to learn more about financial wellness and other success secrets from brilliant minds like P.T. Barnum? Visit our online library on mindset and success to find books by P.T. Barnum and other great self-help experts to strengthen your mind and resolve.


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