It requires discipline as you have to be mindful of everything you do, and most importantly, how you manage your finances.
You have to budget, live on less than you make, and consistently use your disposable income to pay down debt as opposed to spending it and having “fun” with the money.
It requires sacrifice in that it’s unlikely you’ll be able to continue to live as you have been and some sort of change is required.
For most people, if not all, you have to change something about your circumstances because if you don’t you’ll continue to incur debt (or simply be resigned to paying it off slowly).
This sacrifice might be cutting back on eating out, cancelling cable, or finding other unique ways to reduce the amount you spend each month. This sacrifice might also mean getting an extra job or developing additional income on the side.
The hard work, patience, and endurance can all be lumped together. Depending on your situation – particularly if you’re like me and are trying to pay off A LOT of debt (we had $110,000 when we started) – getting out of debt isn’t a short-term endeavor.
It’s likely going to take months, if not years to become debt free. That reality means you’re going to have to continually work hard at sacrificing, learn how to be patient as life will throw challenges your way, and you must then endure those challenges and continue on your path towards financial freedom.
So, if getting out of debt is such a challenge, why would anybody want to do such a thing?
What Does Being Debt Free Mean?
The only reason somebody would pursue a path towards financial freedom and becoming debt free is that they have a very strong reason and desire to do so. Being debt free for the sake of not having debt isn’t enough…
Freedom from debt shouldn’t be your end goal and if it is then you’re likely going to find it challenging to find that patience and endurance necessary to survive the journey. However, the things that come AFTER you’re debt free is what’s ultimately going to propel you to sacrifice and do what’s necessary to beat the challenges you face!
While it’s different for every person and family, freedom from debt opens up a whole new world that I haven’t seen in over 5 years.
1. Being debt free means that you’re FREE!
You’re free from owing other people money. Free from the monthly payments that you’re required to make. Free from the struggle of having to come up with that extra $200 (or whatever amount) to pay those debt payments each month.
2. Being debt free means you can travel more!
My wife and I have a strong desire to travel the world, see all of this beautiful creation, and experience new cultures. Getting rid of our $500/month payments would allow us to easily take a few extra vacations (if not one large one) each year.
3. Being debt free means we can save more!
We’d be able to have extra money each month to put more towards building our emergency fund. It may even mean we can start contributing more to our retirement accounts through our 401(k) and Roth IRAs!
4. Being debt free means we can give more!
While we make it a habit to give to our church every month and to a few other charities, being debt free would allow us to give more to people that need it! In addition to giving our normal tithe, we will start a benevolence fund which we would contribute to every month and have an extra stash of cash to give whenever the need came about.
5. Being debt free means we can spend more!
I mentioned earlier that getting out of debt requires a lot of sacrifice and if you’re ever going to reach your goal then you’ll likely do without some things (possibly for a long time).
We haven’t had cable in over 2 years and I know that’ll be one of the first things I do! I can’t wait to watch all of my Jayhawk basketball games and indulge in a few ‘House Hunters International’ shows! We’ll be able to join our friends when they go out to eat, and we’ll simply have more freedom to buy some of the luxuries in life.
Being debt free will mean something different to every person that reads this. What’s important to remember though is that being debt free shouldn’t be your sole mission. Instead, look at becoming debt free as your launch pad to a new life where financial independence, a secure retirement, and your dreams will finally be in plain sight – not just a distant concept that seems out of reach.
About the author:
Jason is a financial advisor and Dave Ramsey-trained counselor that founded WorkSaveLive. He aims to educate his readers on a variety of financial topics while sharing his family’s journey out of debt.
Find him on Twitter @WorkSaveLive.