Advertising

Become Debt Free By 30 with these Six Rules

Advertising
Become Debt Free By 30 with these Six Rules

I wish someone had told me when I was in college that getting a credit card with a student ID was stupid. I wish someone else would have explained to me what 21 percent interest on store credit cards meant.

Before I turned 30, I was massively in debt with kids, student loans, and no end in sight. Fortunately, with a lot of reading and a lot less spending, I got out of debt before I turned 40. It was a long road–and no fun at all. If I had only realized when I left for college that I was not going to be able to live the way my parents did (after working for 20 plus years, I might add), I might have saved myself a lot of pain. Then again, I was pretty stubborn in my 20s, so maybe not. Either way, you can avoid debt and be debt free by the time you’re 30, if you follow these rules:

Advertising

1. Don’t go to college unless you have to.

This goes against everything everyone told you in high school, I know. I thought I had to go to college in order to “be a person.” Turns out, it’s not remotely true. If you want to be a nurse, a lawyer, a physical therapist or a rocket scientist, then yes, go to school and go to a good one. But if you want to be a writer, a welder, a restauranteur, a baker or something else entirely, avoid the four-year degree. Look instead for a community college that offers certification or an Associates degree in your potential field. Apprentice with someone to learn how to be a carpenter or commercial fisherman. My husband has a degree in English and taught himself computer programming. He is now a leading computer programmer and systems administrator. Be practical about what your job plans are and avoid the massive debt.

2. Spend less than you make.

This sounds obvious, but it is sometimes harder than you think. You need to determine just how much you bring into your household each month, and spend less than that. So, even if that couch looks really awesome, you can’t get the store credit card (even if they give you 10 percent off just for filling out the application). If you need a car, you have to save up for it and take the bus or the subway until then. It seems like a pain sometimes, but when you realize how much you are not spending every month in payments to this, that and the other thing, especially once the couch is stained and the car needs repairs, it’s really much better–and more freeing to not be working just to pay off debts to someone else each month.

Advertising

3. Pay yourself first.

Yes, I know that you have to pay the rent and the power bill and the cell phone bill and the cable bill. But pay yourself first. Take 10 percent right off the top and send it to your savings account. This way, if your car (the one you paid cash for) does have a problem, you’ll have enough saved to pay for the repairs or buy a new one without damaging your monthly bills. If you are having trouble paying at least 10 percent of each check to yourself, then consider lowering your expenses. Get rid of cable and watch shows on the Internet. If you can’t afford your Internet bill, visit the library to use their wi-fi (and get more free entertainment by borrowing books).

4. Make debt your first bill.

If you have debt, make it your first bill (except for rent and savings). After saving an emergency fund of about $1,000 in the beginning, work towards paying down debt your first priority. After you pay yourself via the savings account, pay as much extra as you can towards debt. Reduce your other expenditures in order to get that debt paid down.

Advertising

5. Don’t use credit cards for everyday expenses.

Unless you are using your credit card to save up rewards or miles and are sure you can pay it off each month, do not use your credit card for everyday expenses. If you must keep a credit card, and you really shouldn’t, keep one and put it away for emergencies only. Like that pair of glasses you need when yours break or the car repair that you don’t yet have enough in savings in to cover. As you start saving money in your emergency fund, you will have cash to depend on instead of credit and you can eliminate credit cards from your life entirely. Despite what it felt like in college, credit cards are not free money.

6. Stop paying for stuff you don’t need.

Gym memberships, cable TV, concerts, movie rentals. Get rid of it. Stop paying for extra stuff. Learn how to shop cheap. Go to thrift stores for basic needs like utensils for the kitchen, a chair for the living room, new clothes. There are lots of groups on Facebook now advertising used items for sale. Go for a run or a bike ride instead of going to the gym. Use a yoga home video instead of paying for classes. Skip the spendy concert and go to a free concert in the park. Soon, you’ll realize that forking over your hard-earned cash for stuff that nets you very little in return is more painful than going without it.

Advertising

More by this author

Michelle Kennedy Hogan

Michelle is an explorer, editor, author of 15 books, and mom of eight.

10 Benefits of Deadlifts You Probably Never Knew 8 Things to Remember When You Don’t Know What to Do with Your Life 30 Fun Things To Do With Your Friends Without Spending Much 9 Benefits of Jumping Rope You Probably Don’t Know 9 Signs It’s Time to Quit Your Job

Trending in Money

1 How To Achieve Financial Freedom With the Right Mindset 2 Financial Freedom is Not a Fantasy: 9 Secrets to Get You There 3 40 Healthy And Really Delicious Meals You Can Make Under $5 4 Life Insurance: A Secure Way To Protect Your Future. 5 How To Save Money On Groceries: 13 Quick Tips

Read Next

Advertising
Advertising

Published on November 8, 2021

How To Achieve Financial Freedom With the Right Mindset

Advertising
How To Achieve Financial Freedom With the Right Mindset

What would being financially free mean to you? Have you made the mistake of thinking that financial freedom requires millions of dollars and decades of hard work? When it comes to our relationship to money, the answers really lie in our mindset. Change your mindset around money and your entire financial outlook will change with it.

And no: we’re not talking about putting a check for a million dollars under your pillow at night. This is about you becoming a financially free person, in whatever capacity you choose. And that’s really the key: it needs to be defined by you. So many people outsource this responsibility to society/celebrities/the government etc… and as a result never achieve it.

What if you could identify what financial freedom looks like for you, realize that it is possible to get there in a matter of a few months and then build a road map to do just that?

Read on, because that’s what we’re going to open you up to. This isn’t about giving you specific strategies “guaranteed to work in five minutes or your money back…blah blah.” This is about awakening you to just how powerful you are, where your blocks lie and how to smash through them effectively.

Financial Freedom – What is it?

Well like I said: I’m not going to define this for you. That misses the whole point of this article, but let’s lay out some ideas to get you started.

Typically, when we talk about financial freedom in the west, we really mean: freedom from needing to work, in order to meet financial obligations. We know that there has been a rise in depression amongst nine-to-fivers, 62% as a matter of fact between 2019 and 2020 in the USA.[1] It’s therefore no wonder that there has been correlative uptick in the search for alternative solutions to finances.

This depression is largely as a result of feeling trapped, unable to realize potential and being denied opportunity. It is also likely that, thanks to a more global world and social media: we see just how abundant life can be for some; like a carrot dangled tantalisingly close, but just out of reach. We yearn for more meaning in our lives, more excitement and to be able to live on our terms.

Advertising

Finances are (as we see it) the stumbling block and the preserve of the chosen few…not us.

So to start building an accurate picture of what financial freedom would be for you, begin with what your life would look like if you didn’t have to worry about money. How would you feel if you didn’t have to consider your monthly budget, when putting your hand in your pocket to pay for lunch?

The point is that a lot of the stress and resulting depression that comes from feeling like a ‘wage-slave’ is down to our lack of clarity on what we actually want. We get caught, focussing on what we lack and that perpetuates a mindset of lack that very quickly is reflected in our reality. We are allowing our subconscious, emotional mind to be bombarded with imagery every day that reenforces a sense that we aren’t good enough. That we do not have what it takes.

That wouldn’t happen though if we had done the work of pinning down exactly what we wanted in the first place.

Does Financial Freedom Come at Extreme Levels of Net Worth?

There is a tendency, thanks again largely to how we are conditioned through media, to think that financial freedom only comes at extreme levels of net worth. What if I told you that is completely ill-founded and untrue?

Using the standard/assumed definition of financial freedom for a moment; this means that you need enough capital to generate a return that is greater than, or equal to your monthly expenditure. That doesn’t necessarily tell the full picture, but nevertheless; it’s is a good place to start.

If your monthly outgoings (mortgage, bills etc…) come to $3,000 for argument’s sake, you can achieve that with as little as $108,000 invested over three years.[2]

Advertising

Hardly the millions you had probably envisioned is it?

Remember: we’re not talking about you living a lavish lifestyle necessarily. If that is what you want; fantastic, it’s certainly achievable, but what we’re getting at here is your ability to meet all of your financial obligations without having to work.

I’m sure you’re unlikely to find $108,000 down the back of your couch, but it is a figure that is well within reach of most working adults. A $36,000 salary opens you up to borrowing that kind of money, and even if you have to continue working in the short term in order to service the debt and keep up with your bills; you’ll have a clear end goal in sight.

And you’ll have doubled your income in the meantime, for the same amount of work!

How To Achieve Financial Freedom With the Right Mindset

As we touched on earlier, coming at your life from a space of ‘lack’ simply perpetuates more of the same. As I always say: your environment doesn’t lie. Look around you, if you’re dissatisfied with any aspect of your life, you first need to accept responsibility for it. If you don’t, you’re abdicating your power to make new choices.

You may well have been the victim of circumstance in the past, but how you respond and what you do with that experience is up to you. If you choose to look for the positive, however minor it might be in any given situation – your experience of life will begin to change.

This is, in essence, what The Law of Attraction is all about. What lies behind it is your reticular activating system (RAS). The part of your brain designed to filter out the (as it sees it) unless information, highlight the important information and prioritize your safety. Thanks to it being part of your primeval/‘lizard’ brain however, it predates the conscious mind, intellect and reason.

Advertising

The issue for a lot of us is that we haven’t understood how to communicate in a way that our RAS understands. We can’t translate our conscious desires and are therefore caught in a loop between two incongruous forces.

Our subconscious wants us to be alive and it bases its criteria for this, largely on the principal of: same = safe. Meanwhile, your quality of life, passive income, work/life balance etc… are inconsequential. That part of your mind doesn’t give a hoot about the utility bill or being able to afford a holiday.

It is perfectly possible to show you subconscious/RAS the benefits of financial freedom though, or indeed any other outcome you’d like to see in your life. You just have to speak its language. Becoming debt free and financially free is actually one of the easiest things you can communicate to your subconscious, because you have so much ‘real-world’ experience with money.

Here’s how:

  1. Start by clearing your mind and being present – find a meditation, visualization or breathing exercise that calms your mind, allows you to focus on the present moment and become an observer of your surroundings. The point of this is to stop all of those thoughts buzzing around in your head that are pulling you back to the past, or projecting you into an imagined future.
  2. Then build a mental movie or slideshow of what your average day would look like, were you to achieve financial freedom. We’re not talking about big occasions, huge wins or events; just an average day.
  3. From your position of present observer – start to observe the feelings that arise as you go about this average day in your new life. Do you feel your shoulders relax and drop? Have you got excited ‘butterflies’ in your stomach? Are you smiling more?

Learn to recall these feelings at will – this will connect the dots for your RAS and you will soon start noticing a shift. Think of it as connecting with your desired future and pulling it into/towards your present.

Bonus Hack – Practice Gratitude

We’ve already discussed how you can start attracting/observing the opportunities that will enable you to achieve financial freedom. This involves a lot of work in order to finesse, but the principals are easy enough to understand. Something that we can all do, no matter what we’re trying to achieve, is practice gratitude.

Using the same principals that I’ve outlined above: something of a ‘catch-all’ that we can train our minds to produce more of, is gratitude. If we can shift our mindset so that the next time some negative, external and unforeseen event occurs, we are still able to be grateful for it; your entire experience will shift.

Advertising

Not only will you observe more to be grateful for all around you on a daily basis, but you will shift out of a mindset of ‘lack’. All of the barriers that stood in your way before (not enough capital, stuck in a job I hate etc…) they will shift to becoming things that support your desires and goals.

For example:

The job you hate, when reframed as the means to support a transitional stage of your life (i.e. enabling you to borrow money to invest) suddenly gives you a resource to be grateful for.

The added beauty of this is that your RAS doesn’t know the difference between a big win and a small win. You being truly, deeply grateful for your socks (for example) carries the same weight as being grateful for your health, or your spouse. This is why I say “practice” gratitude. You can start whenever you want!

Look around you right now and find something that you really are grateful for, no matter how small and seemingly inconsequential.

Practicing this will create a snowball effect. Much quicker than you might think: you’ll be overwhelmed with gratitude for your life and all that’s in it.

In Summary

Financial freedom is more within your reach than you probably think or feel. Understand that the limits you’re assuming to be there are largely a product of your subconscious mind, having been drip-fed evidence of that over the course of your lifetime. Changing that might take a lot of effort in the short-term, like cranking over an old car, but the effects will begin to build up quickly and self-perpetuate.

Advertising

Apply this mindset to your financial situation and you will find that it too will begin to ‘snowball’. Financial freedom is closer than you think, so start looking for it today!

Featured photo credit: Pepi Stojanovski via unsplash.com

Reference

Read Next