If you are striving to be debt free, it is important you understand exactly what that means. The definition of debt free is having no debt. Duh. Sounds simple enough, right?
Not everyone understands this though. In our culture, debt has become such a part of our normal life, we don’t even recognize it at times. Using a credit card every month is normal because we are trying to get those rewards and bonus miles. Putting bedroom furniture on a monthly plan is what you do to get the kind of furniture you want, when you want it.
Heck! Even American Express has a “Pay It Plan It” feature with their credit cards where you can turn any purchase into monthly payments with no interest! This is insane! They are geniuses for making debt even more attractive to people.
Can’t afford that new couch you have to have? No problem! Put it on the credit card and sign yourself up for monthly payments for the next year and a half for a piece of furniture. Problem solved!
It’s as simple as that. It’s insane how “normal” it is to turn everything into a payment. This should not be normal. This is a freaking trap!
Monthly payments equal debt. American Express is normalizing monthly payments one credit card at a time.
I’m telling you, lots of people create their own definitions of what debt-free living is. So let’s clarify things for a moment.
When you are debt free, it means you have no debt other than your mortgage. Yes, that qualifies as debt free.
In a perfect world, you would have zero debt (meaning no home mortgage). But, it is pretty difficult for most folks to just pay cash for a home, but if you can, more power to you!
What doesn’t count as debt free?
- Continuing to carry a balance on a credit card every month.
- Using that credit card to sign yourself up for monthly payments.
- Being behind on any home, utility, membership payments/fees.
- Having a car payment.
- Owing money to a family member.
These are the things that people try to just make a normal part of their life. If you have a car payment, you are not debt free!
You should not owe money to anyone for anything (except your home)! That qualifies you as debt free.
When you are debt free it means complete freedom. You will answer to no one. Your life will become yours again.
When you owe money to other people, your decisions about your life are controlled by your money obligations. Every choice you make for your life and future will be dictated by what your finances are.
With financial freedom, you can start to build wealth, open up your future possibilities for your job, home, and family, and give generously to others. No debt means no money obligations.
It will feel like a weight is lifted off of you and you can just relax in your life. There won’t be pressure to “have” to do anything. You will have total control and freedom to know you don’t owe anything to anyone.
Debt free living is the ultimate goal. If you are struggling to get past the mentality of having monthly payments, a car payment or using credit cards just imagine what your life would look like if you didn’t have a single payment.
Pretty amazing, right?!
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