While living debt free might sound like something in a fairy-tale, it is possible. Read on for tips and tricks to help you live a debt free life.
Spend Less Than You Earn
You need to spend less than you earn (and save what you can) in order to avoid getting into debt. If you have a credit card, cut it up and don’t use it (or pay it off every month). Keep a close eye on your bank account so that you know how much you spend. It may be helpful keep a ledger of everything you spend (besides, if you have to physically write down that you bought something, it might dissuade the purchase). Of course, there will be emergencies and situations that will cause you to get into debt, but for the most part, you need to avoid spending.
Distinguish Between Wants and Needs
If you want to be debt free, you need to understand the difference between needs and wants. Needs are the things that you must have in order to survive. Those things are: food, water, shelter, clothing, etc. Wants, on the other hand are the things that make life just a bit easier. Those things are: a boat, ice cream, the newest trends and fashions, etc. Yes, you need clothing, food, shelter, etc. but you don’t need designer jeans, caviar every day, and a penthouse in New York. Only buy what you need, and avoid those things that you merely want.
Flee Temptation
There is a reason why people let you try on clothes before you buy them, and why car dealers will always let you test drive the car. Once you try something out, you will be more likely to buy it. Do not let yourself fall prey to temptation. If you find yourself being tempted by something, get out of there immediately. Avoid even driving down the street that your favorite bakery is on, and if you find yourself tempted by something at a grocery store, leave the aisle as soon as possible.
Cut Spending
We already discussed that you have to spend less than you earn, but how can you cut spending to make that happen? Here are a few tips:
- Cancel magazine subscriptions.
- Unsubscribe from email lists of your favorite stores online. You won’t know about their sales so you won’t be tempted to buy something.
- Downsize your cable subscription.
- Plan your meals before you go shopping. That way, you’ll know what you need for the week ahead, and you’ll have less of a chance of your food spoiling.
- Stop eating out and prepare meals at home, especially lunch.
- Clip coupons, but don’t let it be an excuse to buy something that you wouldn’t otherwise buy.