For many people, being debt free and reaching financial freedom is just a pipe dream. It sounds great, but is for other people, not them. Others believe that debt is just a part of life and if you want anything in life, you will always have debt. However, there is a small portion of society that has taken that leap to financial freedom and currently live a life debt free.
Wealth and Financial Freedom
So, why would a person want to live a life of wealth and financial freedom? Debt is a burden. Debt is a prison, but a prison from which your release date is in your hands. Debt is keeping you from having what you truly dream of having. Financial freedom brings you just that – freedom. When your income isn’t already promised to others, the possibilities are endless. If you had a choice of retiring at 65 with $1 million in assets and no debt or working at 70 with $250,000 in assets and $230,000 in debt, which would you choose? Most of us would choose the first scenario, as we should. I believe that deep down we all want wealth and financial freedom, but many are not sure how to achieve it or believe we never will.
18 years ago I found myself $200,000 in debt, a single mom making $10,000 a year. Financial freedom seemed light years away, but I had had enough of living a life full of stress, bills, never having any money and no peace whatsoever. I decided that whether I ever reached a status of debt free or not, I wasn’t going to get there without trying and without major changes. So I set about gaining knowledge and making the changes that I needed to make to pay off $200,000 worth of debt. It took me several years, but I finally reached a life of financial freedom. I am still working on the wealth part, but without any debt, that part is easier than ever. Without debt, I have the freedom to invest and let my money make money so that when I am ready, I will be able to retire without worry.
Hopefully after reading my story, you are inspired to give it a try. Here are 5 ways to get out of debt faster and begin the journey of wealth and financial freedom:
5 Ways to Create Financial Freedom
1. Stop Using Debt
This seems obvious, but can be very difficult depending on your financial situation. If you are living paycheck to paycheck, it is very possible that there are constantly situations popping up where you feel like your only option is to use debt – a credit card, personal loan, borrow from a friend, etc. However, as long as you continue to use debt, you will never get out of debt, sort of like a hamster on a wheel. But unlike the hamster, you can get off. Having a strong beginner emergency fund will go a long way towards stopping the debt wheel. With a rainy day fund, when something comes up unexpectedly, you have the cash to take care of it instead of relying on debt. This leads me to my next point.
2. Have a Rainy Day Fund in Place
– Newsflash – it is going to rain. It may not be in the forecast this week or next, but one day, whether forecasted or not, it will rain. The best way to cover yourself is to have a rainy day fund in place of $1000 to $1500. This will cover any raindrops that fall and will prevent you from having to use debt. Therefore, you will be able to get out of debt even faster. For example, if you have a $400 car repair, with a rainy day fund, you simply pay cash of $400, replace the $400 and move on with life. However, without a rainy day fund, you charge the $400 and end up paying up to double or triple including interest for the same repair. So now $400 becomes $800 or $1200 or more. This can really slow down the getting out of debt process.
3. Sell Stuff You Don’t Use
We all have treasures around our house – items we thought we just couldn’t live without, but come to find out, we can. And many of those items have value. With Spring just around the corner, it is a great time to kill two birds with one stone – spring clean and collect treasure. There are so many ways to turn your “treasures” into cash. You can use websites such as Ebay and Craigslist to sell items that may have value or demand. For all your general items, have a yard sale. April and May are awesome yard sale months and a great opportunity to make money. After we spring clean every year, we have a yard sale and most years make $100 or more simply by pricing the items to move. Remember, quarters and dollars add up quickly – making the sale is key. Maybe you just make a $100 or maybe you make $1000 from selling your wares – either way, use that money to pay down your debt quicker than you would have otherwise.
4. Adjust Your Budget
This step starts out as a temporary step, but in many cases, becomes a permanent lifestyle. There are two ways to bring in extra money to pay down your debt quicker: up your income or lower your expenses. Take a good hard look at your budget. Find every area where you can cut back – groceries, eating out, entertainment, clothes, gasoline, etc. – and make some changes. Sacrifice is a key to success. Temporary or permanent, it is imperative to lower your lifestyle in order to reduce your debt quickly. Also, shop items that can be shopped to make sure you are getting the best deals – cable, auto/home insurance, cell phone plans, etc. Just because you have been with a company for years doesn’t mean you are getting the best deal you can. Don’t be afraid to ask for the best and don’t be afraid to switch companies if you don’t get it.
5. Do the Hustle
The side hustle that is. As stated before, there are two ways to get extra money. We have covered lowering your expenses – now let’s talk about uping your income. The obvious answer is getting a second job part time. However, for many that is not possible. If that is you, consider creating a side hustle. This is where you take something you enjoy or something you love to do and do it on the side. This is how my business started. I had to work full time in order to get out of debt and save for our 6-8 month emergency fund. But I wanted to start my own business helping other people who were struggling like I had and empower them to financial freedom. I started by writing my first book and coaching at night and on weekends. Doing this boosted my income and helped me reach my dream even quicker that I had planned. Even if you are happy in your career, think outside the box and come up with ways you can turn your talents, passions and gifts into cold hard cash.
Getting out of debt may seem impossible. I thought the same thing. But I am here to tell you, it is not. You now have 5 things that you can do starting today to pay off your debt aggressively. The key is deciding to do it. You won’t become debt free by wishing it. There is no “financial freedom fairy”. The only way to become debt free is to decide and take action accordingly. You have dreams. As I am writing this, I am watching an episode of “Beachfront Bargain Hunt”. One of our dreams is to own an oceanfront condo in Myrtle Beach. But we won’t get there by wishing. We will only get there with a plan of action and by being debt free. Our debt was holding us back. What dream is your debt keeping you from? Today is your day – the day you start taking action to become debt free and live a life of wealth and financial freedom.