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You’ve decided to get out of debt. To get rid of those credit cards, high interest rates, and monthly payments sounds great!
So you’re chugging right along with your plan, paying off debt, and rocking your budget. But then, those creeping thoughts start crawling into your mind.
Once I pay off all these cards, will I just rack them up again?
What if this cheap old car breaks down? I’ll have to finance a new one!
Is it REALLY possible to live a life without debt?
I think you already know the answer to that question. Is life without debt truly possible? Yes! Of course it is.
But that doesn’t mean you don’t have these doubts. I think everyone who’s gone through the debt payoff process questions the whole thing at some point.
You see, once we get so used to one way of life, it’s hard to shift our brains to another way of thinking. Debt has probably been normal to you for as long as you can remember.
I want you to know that it’s normal to have these limiting thoughts and beliefs. It’s normal to feel like your mind is sabotaging you!
I want to encourage you that life without debt is possible. You don’t have to be trapped in debt payments your whole life.
Here are a few things to remember:
Debt Payments Eat Up Your Budget
One of the big reasons you probably decided to get out of debt in the first place was to free up some of your money each month.
The last time my husband and I added up our debt payments, we realized over $600 of our budget was going towards minimum debt payments (and that didn’t include the mortgage!)
Imagine what you could do with $600 extra each month. You could go on a weekend getaway, go on a shopping spree, eat out for more fancy dinners. You could use that money to invest in your retirement, save for a college fund, or give it away in random acts of kindness.
If the temptation to go back into debt creeps into your mind, remember what it will truly cost you. Financial peace of mind is a big one.
Don’t Buy Something Now and Pay for it Months (or even Years) Later
It can be so easy to get instant gratification and get what we want when we want it. It’s possible to finance just about anything nowadays.
But do you really want to be paying for that furniture set for years to come? Do you still want that debt payment when you don’t even like that style anymore and are ready for a new set?
Think long-term and avoid debt now.
A Car Payment is Not a Way of Life
Just because you’ve always had a car payment doesn’t mean you always have to have one. One of the BEST things I did for my finances was buy a cheap (but reliable) car in cash.
Is it the prettiest thing on the road? Definitely not. But it runs and drives just fine and gets me to and from where I need to go.
While some days I do struggle with the the temptation to buy a shiny new car, I know that not having a car payment is helping me meet my financial goals.
If you are tired of paying your car note, sell the car. Buy something cheap in cash (I found my car for $1,000 on Facebook) then save some money each month towards a new car fund. Instead of paying a bank your car payment each month, pay it to your own savings account. Then when you’ve got a good bit stashed up, sell that car and upgrade to something nicer. You can repeat this process until you’ve got a car you love. Then, drive it til the wheels fall off!
Have an Emergency Fund, Not a Credit Card
One of the biggest arguments I hear against being debt free is what to do if an emergency comes up and you can’t pay for it.
This is definitely a valid fear. Fear of the unknown can hold us back in so many ways in life! If you’re afraid to ditch your credit cards in case of emergencies, the best thing you can do for yourself is build up an emergency fund.
This won’t happen overnight, but imagine the peace of mind you’ll have with $10,000 in savings (or however much you decide on.) My goal is a $10,000 emergency fund because that would equal well over three months of expenses in case of a job loss, illness, etc.
With a fully-funded emergency fund in the bank, getting rid of those credit cards can feel a whole lot easier.
Related Post: How Much Should I Have in Savings While Paying Off Debt?
So, Is Life Without Debt REALLY Possible?
You tell me. My belief is YES, 100% living life without racking up debt is not only possible, but should be the norm. Life doesn’t have to consist of car payments and credit card debt. With strategic saving and budgeting your money, a debt free future is possible for all of us.
What do you think? Is life without debt possible? Do you have any other questions about living a debt-free life? Let us know down in the comments!