7 Ways To Live A Debt-Free Lifestyle
Most people live their lives in debt. Whether they’re owing credit card companies, banks, friends, families, schools, and more, they live the entirety of their lives repaying one debt or the other.
While being in-debted in someway has become common-place around the world, there are a lot of people who are not living in debt and having worry-free lives where debt concerns are involved.
If you’re trying to eliminate debts in your business and personal life, here are 7 ways to maintain a debt-free lifestyle.
1). Have An Emergency Fund:
One of the smartest ways to start the journey to becoming debt-free is to build up an emergency fund. This is a bank account where a certain amount of money, maybe from salary or business, is put aside every month, only to be used in the event that an emergency comes up.
When you build up an emergency fund, you can use this sum to cover your very important emergencies, as opposed to borrowing to cover them.
2). Buy & Drive An Affordable Fairly Used Car:
Most people want to own and drive flashy/attractive cars, but the costs of owning these cars are mostly at a premium, especially when they’re brand new.
If you must purchase a car, go for something that’s within your budget, is fairly used, moderately priced, and won’t affect your financial state.
Brand new cars, on the other hand, are usually very expensive, and even worse, they’re one of the largest creators of debt because banks, automobile firms, and other credit houses love to give out loans for the purchase of these cars, which do nothing but further in-debt you to them.
3). Limit Your Housing Expenses:
Find a good home in a modest neighbourhood close to where you work and live there. You don’t have to live in a flashy environment to impress people. The same people you strive to impress will very likely flee when they find out you no longer have enough to impress them with.
If you want to buy a home, purchase it within a modest part of your budget. And the same applies to rentals.
4). Pay Yourself First:
Always take out at least 10-30% of the total amount paid to you every month and put it towards a form of investment into your future. This is also called paying yourself first.
When you pay yourself first, you are investing in your future and limiting the risk of burning through everything you earn without anything to show for it, which could very likely build up to an unsuccessful life in 30 years.
5). 85% Of Your Purchases Should Be What You Need:
Only buy what you need. But since this is hard, let 85% of all your purchase be what you need then 15% be what you want.
When you only purchase what you need, you’ll be able to have enough for the future, family, investments, healthcare, and other emergencies.
6). Avoid Unnecessary Fees:
Unnecessary fees are one of the most “stupid” ways to waste money. Why let the expense be charged if you’ll not use it? Why spend on something too irrelevant if it adds no value to you? Why do things to impress people who would add no value to your life, business, or at the very least, make you happy.
Identify unnecessary expenses and cut them off. You can only reintroduce them when those expenses mean absolutely nothing to your finances.
7). Start A Side Hustle:
A great way to sustain a debt-free life and to stay there is to start and run a profitable side hustle. This way, as you cut off all debt incurring channels, you can also be earning and building up more of your cash base.
What are your thoughts on these 7 ways to maintain a debt-free lifestyle? Let me know by leaving a comment below.