A debt is simply defined as a financial obligation which you owe someone. On the other hand, a debt-free life is a life free from debt. It is a life void of financial stress, embarrassment, depression and slavery. It involves your knowing that you can't always get what you want, but you can always work towards what you want and how you intend to achieve this depends on you.You can decide to save for it or decide to spend someone's else money to get what you want.Remember why spending someone else's money to satisfy your wants be aware of the huge burden you will definitely be placing on yourself and even your immediate family.
You probably have been wondering if it's possible to live a debt-free life and how you can live a debt-free lifestyle.Here are thricks that can help you live a debt-free lifestyle.
1. Be Determined and Disciplined
Determination and discipline is a major key for you to live a debt-free lifestyle.Being determined goes a long way in helping you achieve your goals of living a debt-free life while discipline helps you stick to the goal so you don't swerve. Discipline helps you to stick to a plan or budget.It helps you conquer the temptation of overspending and gives you financial control of your life.This two keys are driving force need to live a debt-free life.
2. Identify your needs and wants
Knowing your needs and wants helps you to set your priority right.Needs are the basic necessities of life i.e things you use everyday e.g Food, clothing and shelter.All this are needs which are meant for the survival of man.Wants is a desire to own something either due to its value or satisfaction it gives e.g car.They are seen as secondary needs.Differentiating them helps you to rank your needs and go for the ones that of more importance leaving those that are not whereby reducing your spending on unnecessary things and saving up.
3. Identify your means and living below them:
Identifying your sources of income or ways you get money will help you know how to spend them.Know what you gross income is like (earned and unearned income).know the total of each and live below them not above your means e.g You have an income of $1000, $700 can be used for your regular needs and in settling your bills and the remaining$300 can be shared into savings and investment..You can as well decide to invest your unearned income and not spend them.Living below your means will help you save for rainy days,make investments and keep you away from debt.In the event of unforseen circumstances you can bounce back on your savings.
Read: How to Invest in Stocks
4. Have a Savings Plan
Savings is the amount you set aside from your income for unforseen contingency.Have a saving plan and analyse it i.e know why you are saving.Are you saving for the rainy days or you are saving to meet a specific need e.g to buy a car etc or for retirement purpose or to manage your regular expenses.Atimes we have more than one reason for saving e.g ( To pay your child's school fees,to buy a car,to buy an equipment for business,to buy a dress etc)but it is advisable to do a scale of preference and choose a more pressing one and start our saving plan.How long will it take you you to achieve the saving plan should also be know and stick to it.You could decide to do a daily, weekly,or monthly savings till you reach your goals.The most important thing is that you are not borrowing.When saving for the rainy days you could keep your money in a savings account or thrift.It should be somewhere that can be readily available to you at the time of need. Saving for the rainy days and for a project will help you overcome temptations of taking loans.
Know what works for you:
Many atimes I see people who prefer to hold cash and say that way they will be able to minimize their spending and some prefer to keep cash at bank and use their debit card to engage in transactions.Whichever works for you stick to it.If you know holding cash will make you spend lavishly then you should only hold specified amount with you and the rest should be left in your debit card .This will help you control your spending and live a debt-free lifestyle.
Investment
This deals with you committing your resources to projects, businesses, assets that will yield return in the future e.g Investing in real estate, buying stocks, buying an equipment for business purpose etc. Investment can be for long term or short term.The longer the period,the higher the risk and the higher the return.They are seen as future plans.So investing part of your income in stock or real estate will yield a return in the future.This type of income are usually known as unearned income.It helps you to plan for the future e.g retirement,death etc and helps you live a debt-free life
Develop a realistic/proper budget and stick to it:
Budget plays a vital role in helping you stay out of debt.It helps you to plan your finances by allowing you to understand what you can afford and it helps you to avoid overspending on things you don't need.A budget is an intended plan of expenditure and revenue. A proper budget contains your projected expenditure.It helps you to know how you spend your money or where you channel your funds to thereby giving you room to keep track of your expenditure and be able to control it if it begins to exceed your revenue.You should always have surplus budget.A surplus budget is a budget where your revenue is greater than expenditure.A surplus budget gives room for savings i.e you have excess revenue over expenditure and you are able to save your surplus or invest it into a profitable business.Your budget can be reviewed every 6 months,3 months,2 months, to effect changes or any adjustments in expenses that might have occurred in the previous month's e.g Inflation, Reduction in expenses, Additional expenses etc.Developing one and sticking to it helps you avoid reckless spending and gives you control over your financial life.
Conclusion
Morals such as discipline, honesty, contentment etc are easy weapons you need to live a debt-free life.To stay out of debt you need to be determined,be truthful to yourself when you need to and caution yourself when you begin to notice you're overspending. Lastly live below your means and most importantly remember to save,make investments and not spend all.
