Be Debt Free Today – Budgeting Solutions For Personal Finance Dilemmas
Do you want to be debt free today?
If you have the money in the bank, of course, you can pay off all of your bills. However, for most of us, being debt free today is more wishful thinking than a reality.
Being debt free today means no mortgage, no auto loans, and no credit card bills. It means that everything you earn goes into your pocket for spending this month or for saving for the future.
In today’s consumer culture, that doesn’t seem likely for most people. In fact, most Australians dig themselves deeper into debt each and every month.
But, if the current economic situation has shown us anything, it is that we have to become more responsible consumers.
There’s Always a Tomorrow
People bought bigger houses than they could afford assuming that the housing market would rise forever. They’re thinking that when their interest only loans run out and they have to start paying the principal, they will be able to refinance at a new, lower rate. They are wrong, and many will suffer foreclosure as a result.
But it just wasn’t the mortgage market where irrational silly foolish thinking took hold. Many blindly went out and started charging up their credit cards as if there was no tomorrow. In fact, after the Global Financial Crisis (GFC) the politicians even encouraged people to go out and spend to show that our economy down under was resilient and it could withstand any amount of battering from overseas financial forces.
They Handed Out Cash Like Candy
They even passed cash stimulus bills which just put the debt burden on our children. They gave us money today which our children and grandchildren will have to pay back with interest.
Perhaps that was necessary given the environment we were in, but now it is time to look at other options. In short, we should look at being debt free today.
The first thing you should do is make a budget on two pieces of paper. The first page A should include all of the things you have to pay. Be judicious on this page. The A page should include non-negotiable items such as your house payment, credit card loans, car loans, etc.
The Difference Between Needs and Wants
You will also include the things you absolutely need on the A page. For instance, you have to have food to live. But, how much do you have to spend on food? In reality, you probably can find ways to feed your family on a lot less money. Eating out is not an A item. Steaks are not an A item.
Clothing is another area where you can save money. While you need basic clothing, thrift store prices find their way into your A budget whereas designer jeans go on the B page.
Chart Your Own Course to Financial Freedom
Your B page includes all of the extras. You may find that there is not a lot left over for the B page at first when you are trying to live debt free today. But, over time, you will find that you can afford more things on the B page.
When you get a bonus at work, you can add it to the items on the B page. When you get a tax refund, it can go to B items. Any increases in salary or second jobs can fund B projects.
If you are serious about living debt free today, you will take a careful look at your budget. You don’t have to buy into the consumer culture that plagues America. You can chart your own course. In other words, you can be debt free today.