Debt Free Life

debt free live

Debt Free Life

A debt free life: No car payments, no credit card payments, no school loan payments, no house payment equals NO payments period. Is a debt free lifestyle worth it? You’d better believe it.

“Keeping up the Joneses” is as American as apple pie. Yet, keeping up with the Joneses could be sacrificing the image of today for the wealth and prosperity of tomorrow. I was already discussing this in the “avoid bad debt” post.

Living Like No One Else

According to nationally syndicated radio host Dave Ramsey, now is the time to…

“Live like no one else, so later you can live like no one else.”

And millions of people tune into Dave Ramsey each day to find motivation for their own little personal war on debt. In Ramsey’s radio shows and
books, the listener and reader are often introduced to success stories at all income levels. These families are sacrificing to get rid of their debt and creating wealth in their new debt free lives.

Plan Your War on Debt

 

Ramsey has a simple plan that works for everyone called “The Baby Steps”:

1. Quickly get a $1000 to start an emergency fund. ($500 if your household income is under
$20,000)
2. List your debt smallest to largest. Pay minimums on all the debts except for the smallest.
Pour every extra dollar you have on that smallest debt until it’s paid off. Then start in on the next
debt until all the debt is paid off. This is called the “Debt Snowball.”
3. Save 3 to 6 months of your monthly expenses in a savings account.
4. Invest 15% of your total household income in Roth IRAs, pre-tax retirement or any investment account. Often refered to as “pay yourself first”
5. Save for college for your children.
6. Start paying off your home early.
7. Use your complete debt free income to build your wealth and give. This could include
investing in real estate and mutual funds.

Stress Free and Loving It

Most of the debt free success stories have the same overarching theme – a debt free live reduces the stress over financial matters. No more late fees, no more interest charges and no more calls.

Once the debt is gone, your risk is reduced and your control over your income is enhanced. That control leads to planning for purchases that used to be financed like cars, furniture, and vacations. And, of course, investing.

The available income allows the creation of real wealth by investing.

Using the simple investment products available to everyone, like Roth IRA’s and pre-tax retirement accounts, you can retire literal millionaires.

Debt free life

So, next time you feel the urge to keep up appearances by buying something that your neighbor has, put down the credit card. Instead get something they can only dream of…

“financial peace.”

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