Secrets of being debt free
Ever wondered what the secrets of being debt free are? Take a look at our top tips for staying out of debt.
Whether it be long or short term, setting goals is essential. Decide what it is you want to achieve, what are your priorities and then you can organise your finances to support those aims. Without goals, it becomes harder to see what the best financial choice may be – find out more about goal setting here.
Recognise need over want
People who remain debt free are able to distinguish between what they need in their life and what is a want. Resisting the marketing hype that may be trying to convince them to purchase desirable goods and instead concentrating on things that will genuinely add value and bring them long term benefit.
The society we live has an instant gratification culture. With interest-free offers and new phone upgrades easily available, even if you don’t have the money right now.
Individuals who are more patient and willing to work towards a financial goal are more likely not to use credit to fund unnecessary purchases. Discover the joy of working towards a financial aim and then realising that dream, while staying in control of your money.
Often if you get into debt to achieve your aim quicker then gratification is overshadowed by the worry of a negative money situation. Practice patience for a happier financial outlook.
Don’t keep up with the Jones’s
Part of being successfully debt free is letting go of what other’s think of you. Stop trying to keep up with your friends, colleagues or just other people in general. Be confident that the lifestyle you are living, and your financial decisions are the right ones for your family.
Willing to make a change
You have to want to make a change and live a life without using credit to fund your lifestyle. Accept there will be limitations. You may not be able to go on an expensive holiday this year; however, if that holiday is your goal, then you will be able to plan for and achieve it in the future without getting into debt.
Every day you have to commit to the change you wish to make whether that be consistently sticking to your household budget or cutting back on non-essential expenses.
While you can get support with any change you wish to make, only you can take the day to day steps to maintain a positive outcome.
Know your ‘why’
If you understand why you are doing something, then it doesn’t seem as hard, and you are more likely to stay motivated. Discover why you wish to remain debt free. Is it so that you don’t have to work as much and can have more family time? Is it to be under less financial pressure? Do you want to save for retirement or pay for kids to go to university? Use your why when times are tough to give you the strength to carry on.
Live within your means
People who don’t have any debt are usually living within their means, spending less than they earn. One way to stay in control of your income and outgoings is to have a budget. Allocating your funds for specific purposes, and consistently sticking to your budget.
It allows you to see at a glance what your money situation is and helps you make better financial decisions based on the economic reality. Get help with setting up a budget here.
Have a plan
A financial plan is like a map to get you to where you wish to be in life. Without a map you may wander off down the wrong path, making mistakes and it will take longer to reach your destination.
A financial plan is unique to you; it reflects your goals, desires and values. It’s a living thing that flex’s with the challenges of life and helps you head in the right direction towards a brighter financial future.
Accept where you are
It can be difficult to accept the financial situation you find yourself in. People often feel upset, angry, embarrassed and ashamed about the debt they have accumulated. However, you are not alone. 8.3 million people in the UK are over-indebted, and 22% of UK adults have less than £100 in savings.
Part of making a change towards becoming and staying debt free is accepting where you are and seeking support if necessary. That might be confiding in a friend or choosing to get professional financial advice.
It can be challenging to face the reality of your current finances. However, it is the first step in moving forward to a more favourable position. Being honest about your circumstances means that friends are likely to be supportive and considerate rather than encourage you to spend or socialise at places you can’t afford.
Surround yourself with people who want to see you do well. By working towards being debt-free, you may unknowingly encourage others to join you on the journey. Having a supportive group of people can make all the difference to your success.
While you will still make mistakes, having loved ones who can help you get back up and carry on, means you are more likely to stay in control of your finances for the long term.
You don’t have to do this alone. Consider working with a Life Centred Planner who can provide professional support to help you create the life you want to have. A Life Centred Planner puts you and your wellbeing at the centre of everything they do. From looking at all the options to manage your debt to building a financial plan and helping you to achieve your best life. Contact us for a free chat and find out how we can help create a brighter future for you.
Life Centred Planners help individuals, businesses and families achieve the best quality of life they can with the resources they have. MRA specialise in cash-flow analysis, taxation, debt management, savings and investments, life centred planning and much more. Life Centred Financial Planners are passionate about working with you to help you achieve your life and financial goals, get control of your finances to enjoy a brighter financial future.