Everyone likes the idea of becoming financially free. So, why don’t more people achieve financial freedom?
Let’s take a look at the picture of American consumer debt. According to 2016 data, the current outstanding revolving consumer debt in the United States is $952 billion.
If you’re like many, you may be wondering how you can get rid of your own debt.
One of the biggest problems with debt is this false idea that “I must have this thing. This thing will make my life easier or better.” Most of us have lived with this feeling of dissatisfaction, of “stuff aquisition syndrome.” The problem is, there’s not enough stuff in the world to produce lasting contentment.
The simple answer: spend less money than you make.
Simple, but not easy. It may mean getting a second job so that you can “afford” to pay off your debts.
So, what is the most radical technique you can practice? Behavior modification.
Our lifestyle choices and behavior around money are 90% of the problem. The problem is compounded by the fact that we live beyond our means for so long that when real trouble comes, we don’t have a safety net. Enter credit cards. They provide a temporary feeling of safety, but that “security” comes at a price.
When consumption begins to lose its hold on us, there’s light at the end of the tunnel.
And this isn’t new advice. Financial thought leaders all agree that changing our minds leads to changing our behaviors, and changing our behaviors can lead to financial freedom.
So, let’s look at some myths that can lead you to a fresh perspective.
Myth 1: I can’t have fun without spending money.
Spending money can be fun (sometimes). But the problem is when anxiety about all the purchases you’ve made sets in. That’s the reality of the situation. Losing the fear of financial insecurity is one the benefits of spending less money. In terms of fun, there are many ways to enjoy your time without splurging.
Myth 2: If I stop overspending, I won’t be able to keep up with my friends.
Keeping up with the Joneses. If your friends are in debt because their lifestyle exceeds their earning capacity, they’re living lives of quiet desperation. Don’t concern yourself with other people’s opinions about how you allocate your financial resources. Chances are, once you change your spending habits, you’ll be happier and mentally calm, and your friends might ask you why you seem so at ease.
Myth 3: If I start telling my kids “No,” they will hate me.
It’s true, kids do love their stuff. But, children learn a lot from us. If we frequently bring stuff into our homes, our children will pick up the habit. Rather than telling your kids “No,” start with asking yourself hard questions about your purchases, and let your kids be involved with that process. A simple question like, “Where are we going to put this? Do we have room for it?” can make all the difference.
In this way, you can teach them to interrogate their own wants to move towards acquiring the kinds of things that are not inspired by whims.
Myth 4: If I don’t constantly update my wardrobe, my coworkers will look down on me.
You know that coworker who is always dressed impeccably and never seems to wear the same outfit twice? Chances are, their credit card is nearly maxed out and their closet is about to collapse under the weight of all that clutter.
You can still be the best dressed member of your team without spending a bunch on clothes or needing to have endless outfits. Often, advocates for a simple wardrobe are often the best dress among us. Concepts like Project 333 utilize a capsule wardrobe theory to minimize the number of pieces in your seasonal wardrobe without sacrificing quality or style. If you are concerned with variety, consider organizing a swap meet with friends. It’s a great way to get people together and give new life to forgotten and previously unloved garments!
Myth 5: Getting out of debt will take too long.
Procrastination. If you’re putting off starting because of the difficulty of the task, you’re setting yourself up for failure and prolonging the process even more. The truth is, everyone’s process is unique. Depending on the amount of effort and intensity you apply toward getting out of debt, you may do it more quickly than you’re now imagining. The first step towards getting out of the hole? Put down the shovel. For information on budgeting and becoming debt free, visit CreditGUARD of America.