Achieving financial freedom isn’t simply based on chance or a high-paying job but rather requires persistence and some very disciplined behaviors that most individuals are unwilling to implement.
All extra income, including bonuses, tax refunds, and unexpected gifts, belongs to your creditors and not to you! The most common problem that occurred over the past several years amongst individuals who became financially independent (debt-free) is that individuals treat this money as “fun” instead of “freedom”.
This is a real-life example of someone who eliminated $140,000 in debt within five years without selling anything or winning the lottery.
This includes the elimination of student loans, credit cards, and car loans as proof that it can be done.
Believe it or not, motivation played little part in this individual’s desire to accomplish debt elimination.
When he finished school, all he could see was all his debt; it was an in-your-face reminder. While others were busy upgrading their lifestyle (moving to a new apartment, new furniture, etc.), he was busy making the right choice for himself.
His focus was strictly on getting out of debt in the shortest time possible.
There was a twist at some point along this journey, however.
Having come to the realization that he didn’t need most of the things that people waste their money on.
- No extra gadgets.
- No fancy upgrades.
- And definitely not that incessant “treat yourself” mentality.
Once this clicked for him, spending declined quickly and when spending declines, debt goes down faster; it’s just maths.
Taking note of his progress became a daily habit for him.
Not every now and then. Not once a month. Every day.
He recorded each of his payments into a spreadsheet; he recorded his balances; he recorded his estimated date of becoming debt-free. This visual feedback gave him momentum and made the lengthy, laborious process of getting out of debt feel more tangible, real and measurable.
Seeing progress through various methods helps motivate you to keep working toward your goal.
Side income.
While it was important to cut expenses, it was equally important for him to find alternative sources of income.
He didn’t rely solely on a single paycheck and instead sought out additional income opportunities — whether through online work, tutoring or teaching in some way. They weren’t big ticket items, they were consistent, equal and created more cash-flow.
He used the money he earned from these extra income sources directly toward paying off his debt.
One area where he was able to make a significant impact was by conducting a thorough audit of his fixed expenses.
Everything with monthly payments, like subscriptions and insurance, was evaluated for monthly versus yearly payment options and it brought down bills by an average of 20 percent.
This is a tip that isn’t likely to go viral, but it works when you build small savings over time to create big savings.
When everything around us slowed down, and our expenses decreased, our cost of living went down; our opportunities to spend money disappeared and we had more money available each month than we have had in the past.
Instead of letting that extra money go to waste, it was all put toward paying down debt.
Once you have no more debts to repay, new opportunities will open up to you. You may be able to invest. You may be able to buy a house. You may be able to take a vacation without feeling guilty about it.
True freedom is not just restriction to a number; it is truly about your options.
You may be surprised that all that discipline did not result in some huge party. It resulted in one significant purchase-many of which you earned, and did not borrow.
You don’t have to be perfect. Sometimes you will slip, sometimes you will feel frustrated, and sometimes you will feel like you are going nowhere.
However, if you are committed to being consistent across the board and using intent and purpose in your treatment of every dollar spent, you can completely change your financial future.
