How to Make Debt-free Living a Reality

With interest rates soaring and shrinkflation eating away at the grocery bill, the idea of living debt-free may seem difficult, or even impossible. Things are already expensive, how can I pay down debt, too?

While it has been challenging at times, debt-free living has been one of the best things that our family ever did. It has helped us reach financial and personal goals that once seemed impossible. 

In our pursuit of living debt-free, we have:

• sold extra stuff that weighed us down
• unloaded a Money Pit of a rental property
• enjoyed better mental health not having personal loans and mortgages to pay
• built a 6-month emergency fund
• learned to live on less
• created sinking funds to buy replacement cars, pay for orthodontia, and help our kids get college educations
• built a small business on a shoestring budget
• saved the cash for big family travel with extensive trips in Europe and Asia
• developed a meal planning and grocery shopping system that has saved us $1000s

Now, 17 years into this journey of debt-free living, I can promise you with every breath in my body that it has been worth the hard.

What is debt-free living?

There are loads of books and content creators out there talking about debt-free living and lots of debate about how to define the term.

My definition of debt-free living is this: to live life in the 21st century without carrying debt on a car (or boat or other mechanical toy) or on credit cards. 

While we don’t own a home and am very happy not to have a monthly payment on one, I recognize that for some people, debt free means that you don’t have smaller debts; some would excuse a mortgage. I’m cool with that.

Debt-free Living is possible in the 21st century.

You CAN get out of debt.

Yes, yes, you can. I don’t need to convince everyone. Many of you already now that you should, must, and can. And you’re doing what it takes to make it happen.

But, some of you make a lot more than the rest of us. Some of you are carrying balances you don’t need to carry. Some of you really can get out of debt, and I want you to think about doing it. You can do it.

(Please hear my empowerment voice, not my nagging, guilt-tripping voice.)

If you are in debt and you have the means to get out, I want to encourage you to do it.

By means I am referring to the fact that you have “an income to sufficiently pay for your basic needs with a bit extra to pay down debts instead of buying stuff you really don’t need.”

The Benefits of Debt-free Living 

1. You will have a freedom you never knew existed. You will feel less stressed because you will be beholding to no one. It’s a really good feeling not to owe money to someone else or have to remember bill due dates all the time. It makes you truly independent.

2. You will be ready for an emergency. When you’re not scraping just to get by, you can position yourself to ride out a recession or other tough times. Living debt-free means you can save for a rainy day instead of paying off debts. 

3. You will enjoy your adventures more. When you get rid of your debts, you free money up for bigger and better things that you will enjoy more. Dinners out, new clothes, vacations: when you do spend money, it will be more fun because it’s paid for.

How to Achieve Debt-free Living

Here are the basic steps to get from a debt-filled life to a debt free life:

Stop using credit.

Yes, I said it. Stop using your credit card. You’ll only create a bigger hole for you to climb out of.

It may take some getting used to, but you can do it. Don’t acrue more debt. Stop the leaks.

Set a budget.

Set a zero-based budget. Tell your money where to go, instead of it telling you there’s nothing left.

It’s pretty simple to create a basic budget; no fancy calculators required.

Build an emergency fund.

Create an emergency fund. Build a cushion for yourself against the unexpected.

Emergencies will arise. Debt-free living means that you have a plan to meet them head-on so you can stay debt-free.

Pay off your debts.

There’s all kinds of debate about whether you should use the debt snowball or the avalanche method to paying off debts. Some folks say you should pay off the highest interest rate. 

We got out of debt with the snowball. Paying off the little debts built confidence in us that we could accomplish great things. It also simplified things as we were basically picking off the easy targets so we could take on the bigger enemy Doberman Pinschers.

You’re a bulldog, right? Throw any extra money you receive at your debt each month. You’ll be living debt-free sooner than you think!

Sell stuff you don’t need.

If needed, sell some stuff to earn more cash. We realized that there was plenty of stuff that someone else could want — and be willing to pay for — that we didn’t really need. We had garage sales and sold stuff on eBay and Craigslist. 

For us, financial stability and debt-free living was more important than a bunch of piddly stuff.

Increase your income if possible.

I would not be a professional writer if we hadn’t needed to increase our family’s income. I might have done it for fun, but I wouldn’t have been as motivated to restart my career if we hadn’t had financial needs. I started out writing articles for parenting magazines, at first, and then moved on to blogging and cookbook writing.

If you need more income, find out ways that you can drum that up. Home makers can have side hustles without sacrificing their homes and families.

Delay gratification.

This is probably the hardest part tof debt-free living: delayed gratification. 

After all, you’ve had a hard day; you may want to find comfort in a PSL. But, that puts you another 7 bucks away from your financial goal. Be willing to defer luxuries in order to get the prize. Be willing to do without.

Live below your means.

Living below your means is age-old wisdom. Our ancestors all knew not to spend more than they made. They could do it in very rough circumstances, so can we. It’s the essense of debt-free living.

Yes, it’s weird to live debt-free, but it’s good. It’s not easy, but it’s good. And you CAN do it.