Debt free living may be your dream, but it's not an impossible one. It is, however, a goal that will take planning, hard work and some self-discipline. Here are some points to remember when pursing the debt free life.
Denial is an ugly and dangerous thing, and yet most of us would rather not think too closely about how much money we really owe. But if you want to break free of debt, you are going to have to make a realistic assessment of how much you owe.
Devote a couple of quiet hours with paper, pen and calculator. Get the entire total, no matter how painful it may seem. Realizing how deep in the water we are financially is the first important step in swimming back toward the shore.
Unless you're Paris Hilton or Nicole Ritchie (and how many of us really want to be those two anyway?), no one is going to set you on a piece of land to pursue the simple life.
So devote a few hours to the project. Sit down with a pen, paper and calculator and figure out how much you will have to pay each month to pay off all you owe. Make a plan to pay more than the minimum payment on each one of your debts, until all have been erased.
Your debt free living goal from this day forward is to never charge more than you can realistically pay off in one month. And if your current payment is already more than you can afford, then cut up your credit card. Keep a small notebook with you and keep track of everything you charge. When you have reached your monthly limit, leave your credit card at home.
Never count on that day when you get a bigger salary or inherit money from your Aunt Bessie to pay off your debt. The truth is, if you can't manage the money you are making now, you're not likely to manage it any better when you make more money. For most people, the more they earn, the more they spend.
If you're trying to keep up with the Joneses, you're in trouble: the Joneses are in deeper debt than you are. With almost half of all Americans spending more than they earn and the average credit card debt per household being $15,000 according to one report, it's a given that most people live way beyond their means, spending far too much on clothing and other luxury items that they really can't afford.
Related article: How to be debt free for life.