Ok, indulge me…lemme get on my soapbox for a hot minute.
It has become the “it” thing to be debt free. Everywhere all the peeps are talking about is “debt-free living”.
You hear all of these buzzwords and ideas thrown around like total financial freedom, simple living, anti-consumerism, financial independence, very early retirement (like under 40 early), frugalista, minimalist living (frugality in disguise), laptop living, millionaire by 30…ex-pat by 35. Its bananas!
Now obvs this is a personal finance blog, so of course I’m shouting it from the rooftops…who doesn’t want a debt free swagaliscious life?!?
But often times I find that there is a whole lotta info left out of the entire story. Read on as I debunk the top 8 myths about being debt free and drop some major #truthbombs on ACTUALLY becoming debt free!
Myth #1: You can do it in some insanely fast amount of time.
TRUTH:
I am sure you have seen and been inspired by the sensational testimonies of people getting rid of tens of thousand of dollars worth of debt in a few months…but for reals, your financial situation didn’t happen over night. Well I got news for ya sista’, most people won’t get OUT of debt over night.
I don’t tell you this to discourage you or say its impossible, but to encourage you to have a true expectation of your journey. This is a marathon, not a sprint. And if you go into it with that mindset, then you’re setting yourself up for success right out of the gate!
Myth #2: There is only one way out…frugal city.
TRUTH:
No, no AND no…there are a million and one ways to become debt free, and not all of them involve eating rice and beans for months on end and walking to work.
Not that there is anything wrong with that path either. But you need to understand your personality and work WITH it if you want this to work!
What I mean is, if you struggle with extreme discipline, then that particular strategy will never work for you. Oh you may see some progress, but you’ll be resentful the whole way and then fall off the bandwagon never to return.
Instead of taking a surgical knife to your finances, you could put in the mental work to find creative ways to increase your income and put that towards debt. If you want to get out of debt and stay out of debt, you have to find what works for you and stick to it.
The one size fits all approach rarely works for EVERYONE…looking at you one size fits all leggings. #byefelicia
Myth #3: Getting out of debt is impossibly hard.
TRUTH:
That couldn’t be further from the truth, it’s only as hard as you make it. If you walk around with a victim mentality then you bet your arse this is going to be hard. Accept your situation, forgive yourself, and move on. #victoryovervictim
***TOUGH LOVE ALERT – pity parties are for children, nuff’ said. #winnersoverwhiners***
Now, I am not saying that there won’t be rough patches and times that you want to rip your hair out…any change comes with its fair share of frustration.
But its up to you whether you choose to dwell in those negative emotions, or make the decision to mentally pivot away from those feelings.
The choice is totally up to you…it can be hard and suck, or it can be a freeing process.
Myth #4: Once you’re out of debt, you’re out for good
TRUTH:
Oh hunteeeee noooo, not if you don’t deal with your money mindset. I describe a money mindset as the involuntary programming embedded in your head.
This program was set by the things you witness surrounding money growing up, how your parents handled money, how they talked about money, if you grew up with a lot money, if you grew up with no money, the financial situations of your closest friends…all of these things served to shape your view of the world and eventually your relationship with money and ultimately your money habits.
If you don’t believe me, just check out the gazillions of documentaries on lottery winners that burn through cash faster than Bernie Madoff! Ever wonder why that is?
Well now you know…they got all of this cash < —solves the immediate lack of money…but they fail to keep it because theY fail to address their underlying money issues. #moneyprogramsonautoplay
Myth #5: All debt is bad debt
TRUTH:
Nope, not true. Unless you’ve been living under a rock somewhere, I am sure you have heard of the financial Dave Ramsey. While I agree with many of the principles in his “baby step” program, we part ways on the topic of debt.
In his book he promotes having absolutely ZERO debt, for no reason…at all. This may sound good on the surface, but it can be counter productive for a variety of reasons.
- By using some form of a debt instrument, you build credit. Now he goes into detail as to why he doesn’t care about credit…well you my friend are no millionaire yet and will need your credit for worthwhile purchases such as a home, or to get car insurance, secure an apartment, or even land that dream job. There is no getting around these things UNLESS you have liquid cash sitting in the bank at your disposal…I didn’t think so, me neither (yet).
- If you own a business that needs capital for growth, typically you need to take on some type of debt in order fulfill that need and grow. Personally I see nothing wrong with this.
It is my personal opinion, that debt, just like everything else that can be abused, it has to be used wisely…and that’s where the focus should be. So if you know you have a problem being a wise steward with your credit cards, then yes, you should absolutely exclude them from your financial resources. But if that’s not an issue for you, and you routinely pay the balance every month, then by all means…use your credit cards.
In the end, debt is just a tool or resource that we use as leverage just like good old-fashioned money. You have to treat both with the proper respect and use with caution.
I would rather see you dealing with your underlying money programs rather than avoiding debt like the plague…
Myth #6: You won’t need to worry about a spending plan anymore
TRUTH:
Similar to the person that loses a lot of weight, they can’t just stop working out and sit around pigging out on bon bons and cake every other day. They’re likely to wind up worse off than when they started.
There is work and maintenance involved. This is a lifestyle change, not a crash diet.
Managing your money never stops; it’s just a different set of challenges that need solving.
Myth #7: Debt free automatically means financially free
TRUTH:
Just because you don’t have a documented loan doesn’t mean that you don’t owe anything to anyone. Try not paying your property taxes and let me know how that works out for you.
While being debt free does open up a lot of discretionary income, that doesn’t give you free reign to live how you want…to accomplish that you need to become financially independent. Meaning you have so much passive income coming in that you could technically retire, not work another day, and your bills remain paid.
Until that day…you still gotta keep your living expenses in check and in line with your income. And to quote one of my fave games, if you don’t, it’s a “go straight to jail. Do not pass go. Do not collect $200!” BUH-bye!
Myth #8: You’ll never have another money fight
TRUTH:
Although debt can exponentially increase the tension and explode money fights, the debts are rarely the root cause of the problem. Arguments over money are simply fundamental disagreements betwixt two people that have totally different money habits.
Remember when we talked about money programming? Well your spouse’s program is most likely very very different than yours, which can cause all kinds of friction…debt or no debt.
Its important to acknowledge your differences and communicate your money needs to one another. Dealing with the root of the issue it what will help to eliminate UFC type money showdowns.
Whew…ok I am officially off my soapbox! It just gets my goat when I see only half of the story being told, if you’re going to be successful on your journey to debt free then you better be making informed decisions.
Hopefully I have given you some food for thought. I want you to have a strong foundation so that you experience lasting change in your finances. And to do that you have to understand what you’ve signed on for, the good and the difficult!
What other myths can you debunk for me? Drop a line below!
Lovin’ on your words, Yvonne! I’m a fellow EBA/ACTIVATE member, and I’m beyond thrilled to hear you ‘get real’ and deal with many good ideas that have been mangled by our own bad habits. We’re on this journey, too, and we can testify to the adage, “Old habits die hard!”
Thanks for your encouraging words to face the truths of our financial frustrations, take responsibility for our bad habits, and go boldly forward to a financially independent future!
Keep being amazing!
Hi Beverly!!! So glad this is resonating and thank you for the words of encouragement. ?