Living a debt-free life is a goal that many people aspire to achieve. By adopting certain strategies, you can take control of your finances and work towards a future free from the burden of debt.
Committing to a debt-free life requires discipline and determination to begin with, and afterwards, and there’s no short-cut. There’s only debt repayment. To make this second nature, and by implementing the following 5 strategies (among others) and seeking guidance from mentors and teachers like Dave Ramsey, Robert Kiyosaki, and Grant Cardone, you can take control of your financial future and pave the way for a debt-free life.
1. Live Beneath Your Means
One of the fundamental principles of financial freedom is to live below your means. This means spending less than you earn and avoiding unnecessary debt. By embracing a frugal lifestyle and making conscious choices about your expenses, you can free up more money to pay off debts and build a solid financial foundation.
This doesn’t mean that you go without things that you like. It means that you weigh up what is real for you, and what is not. You may choose to live frugally, or you may choose to live wisely.
2. Take the Baby Steps
Dave Ramsey’s 7 Baby Steps approach is a popular method for eliminating debt. It involves starting with small, achievable goals and gradually progressing towards larger financial milestones.
This method emphasizes the importance of facing your debt head on, and not shuffling your debts from one place to another without ever attending to your behaviour as it relates to money. These are the baby steps summarised:
|1. Save $1,000 for your starter emergency fund.
|2. Pay off all debt (except the house) using the debt snowball.
|3. Save 3–6 months of expenses in a fully funded emergency fund.
|4. Invest 15% of your household income in retirement.
|5. Save for your children’s college fund.
|6. Pay off your home early.
|7. Build wealth and give.
3. Listen to Your Rich Dad, Not Your Poor One
Robert Kiyosaki, renowned author of Rich Dad, Poor Dad, and the co-founder of Rich Dad along with Kim Kiyosaki,encourages individuals to seek advice from those who have achieved financial success. By surrounding yourself with people who have a positive mindset towards money and investing, you can gain valuable insights and guidance to help you make sound financial decisions.
The reverse is true too, if you surround yourself with people who give poor advice and have a casual relationship with money, you’ll end up like most Americans – working for the man.
4. Invest in Yourself and Assets
Grant Cardone, a billion dollar private equity fund investor, and prolific educator on social media, emphasizes the importance of investing in yourself and assets. He teaches people to avoid having a scarcity mindset, and instead to 10x your productivity and expectations.
By continuously learning and improving your skills, you can increase your earning potential and create opportunities for financial growth. Additionally, investing in income-generating assets, such as real estate or stocks, can provide long-term financial stability.
“Becoming successful involves investing in yourself. This includes working on your money, educating yourself, and practicing what you’ve learned.”Grant Cardone, LinkedIn
5. Transform Your Mindset
The author in the Bible says:
“Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is — his good, pleasing and perfect will”Romans 12:2, NIV
Developing a positive and proactive mindset towards money is crucial for achieving financial freedom. By conforming your beliefs and attitudes about money, and overcoming the casual and lazy ones your friends or work colleagues might have, you can transform limiting beliefs into healthy financial habits. You will need this mindset to overcome the perceived mental difficulties of paying off stubborn debt.
There’s so many times when you think it’s almost impossible, but of course it isn’t. Embrace the realness of walking the path, and having faith that it will lead to your goal of living a debt-free life.