Living Debt Free

by Charlotte Wood
(last updated February 21, 2009)


Living debt free is a part of the modern day American Dream. Wouldn't it be great if everyone actually owned their house, their cars, their washing machine, their furniture, their computers, and their education? While seemingly impossible in this day and age, there are ways you can pave the way toward financial security and a life that is free from the vices of debt.

The biggest concept to realize (and probably the hardest as well) is if you want to live debt free you have to live within your means. You have no chance at living debt free is your output is greater than your input. Approach your finances and budget realistically. While you may want that new washer advertised on TV, you may not need it. What matters is not what you need but what you can afford. If you can't afford it and your current washer works fine, then don't even think about it. Once you become more financially stable, a strict budget may not be necessary, but regardless of your financial situation, discretion is always needed for any kind of spending you do. Don't be extravagant and don't go over the top. You can have fun, but you don't need to be gaudy.

While this may seem antithetical to the concept of living debt free, it's important to borrow only what you need. Face it—you probably never will have $350,000 to pay for a house outright. The solution is to take out a mortgage which is considered debt. The trick, though, is to be wise when taking on debt. Is being in debt for a home worth it and, more importantly, do you have a plan for paying it back?

Education is another debt-inducing endeavor that many people consider worthy of the monthly payment. If you borrow only what you absolutely need to borrow then you won't take on extra expenses you can't afford. If you dive into these debts having a plan for paying it back and it you stick to that plan then you'll be ready to go. Your entire life may not be debt free, but that's not necessarily the goal; the goal is to not be burdened down and buried in debt. (Note: car loans aren't necessarily a wise debt; if you can save for the car and pay for it in cash that can take a huge financial load off your shoulders).

Living debt free, regardless of if you have a mortgage or not, is all about having control of your money and having a plan for it. Map out your financial assets and know how you're going to use them. If you're in control of your money, then you'll be free of stress-inducing and burdensome debt.

Author Bio

Charlotte Wood


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What is six minus 5?

2014-05-17 13:53:07


Seems like a vicious circle sometimes. For many years my only debt was my mortgage but we never had any leftover cash even for savings.

Now that the mortgage is done, we're having to find cash for repairs and maintenance and that's sent us back into new debt. The first 4 year loan to repair the kitchen was only 1 year paid when it became necessary to take out another loan to repair the roof.

At this point, if anything else comes along which we MUST do, we won't qualify for another loan. Where do we go from here??