9 Ways to Become Financially Free and Protect Yourself from Debt

Over the last year or so I have been reflecting on my life and ways in which I can improve it.

One particular area is FINANCES.

Yes… Money!

Although money isn’t the most important thing in life it can impact us in many ways. Both positively, and negatively.

Money can be liberating, and can set us free. It can also weigh us down and if we’re not careful, bury us.

It’s no secret – Getting your finances in order is important. However, many people get dazzled by lifestyle and ‘stuff’ and before they know it, their financial situation is out of control.

Here’s the thing – I’ve made some really bad choices when it comes to money.

Choices that have cost me a lot of money and have caused me many sleepless nights over my lifetime.

If you can relate to this then the purpose of this post isn’t to rub salt in the wounds, but rather provide you with some ‘rules’ that can change your financial situation and steer you on the right path.

I’ve been listening to a lot of podcasts and interviews recently. All of which are from successful people.

People who have made the RIGHT choices and avoided the common pitfalls that many of us fall into – and have become millionaires as a result.

I’ve taken down notes from all of these podcasts and interviews and have collated I’ve taken down notes from all of these podcasts and interviews and have collated 9 common ‘mantras’ (rules) that these successful millionaires have shared.

Rules that they applied to stay debt free, build wealth and live a less stressful lifestyle.

Here they are – So take notes!

#1: Live Below Your Means

Although this is an obvious one I wanted to include it because it’s one of the most common pitfalls that leads to debt.

This rule is simple: Spend less than you earn.

The majority of people need instant gratification. They buy ‘stuff’ on a whim without really asking themselves if they can afford it or not.

Credit card purchases can snowball, and trust me, if you have to purchase an item using a credit card because you don’t have the money – You’re unlikely to have the money later to pay off the credit card.

It’s a viscous circle – Don’t do it.

Live within your means, because living above that will eventually bury you financially.

#2: Don’t Try to Keep Up With the Jones’s

I’m assuming you’ve heard this term before. It means stop taking note of what other people have around you, and then trying to outdo them.

Buying things you don’t want, to impress people you don’t even like, is a sure way to get yourself into debt.

What others have is of no concern to you. Stay in your own lane and focus on yourself.

#3: Make Sure You’re On the Same Page With Your Partner or Spouse

If you have a partner or spouse then it’s important that you’re on the same page when it comes to goals and finances.

There’s no point in one of you being careful with money, or saving – If the other is being frivolous with money.

You need to be on the path. The same journey – together.

If you’re not then you’ll see the push / pull affect. Not only will this prevent you from achieving your financial goals, it will also cause severe problems in your relationship or marriage.

So, sit down and talk – and get on the same page!

#4: Don’t Change Your Standard of Living When You Get a Raise

When people get a raise with their salary, or their income increases, the first thing that they tend to do is increase their standard of living.

They spend more. They buy more stuff. Buy a bigger house. Buy a better car. Buy expensive clothes. Eat out more. Etc.

People who are successful and have reached a high level of wealth usually do the opposite. They retain their standard of living and make smarter decisions with the extra income. This leads us perfectly onto rule #5.

#5: Save or Invest Money Frequently

Saving or investing money is what builds wealth. You should invest frequently, no matter how small.

Saving and investing money has the same mechanics as accumulating debt, but in a different order.

Debts can snowball easily – But so can saving and investing.

By putting money aside each and every month, no matter how small – It will soon grow.

Remember: Consistency is key here!

#6: Think Carefully Before Any Significant Purchases

A big mistake that many people make is buying something that they didn’t really need, and often with hindsight, didn’t even want.

Instant gratification can feel good – in the short term.

But delayed gratification will help prevent you from making hasty buying decisions. Decisions that you may regret shortly after.

Take a day or two before buying anything sizeable and ask yourself whether you REALLY need or want it.

#7: Keep Yourself Free from the Love of Money

That’s right! Keep yourself free from the love of money and be satisfied with what you have.

When you are grateful for everything you already have in your life, you’ll stop chasing the things you don’t.

The truth is, if you’re always chasing ‘more’ you’ll never be satisfied with what you have.

It can become very costly too! Do you really want to live your life that way?

#8: Don’t Buy Brand New Cars or Have Hefty Car Payments

In a normal household, cars are usually the 2nd largest purchase you’ll make (after a house or property).

The truth is that car repayments can often be more than a mortgage repayment, and often with a higher interest rate too.

One of the secrets of obtaining wealth is to NOT buy a new car until you have reached financial independence.

Those that have achieved financial freedom state that if you can’t afford to buy a new car outright, you CAN’T afford the car.

Until you reach that point – stay within your means and buy a cheaper, used car that will have less of an impact on your finances – and that will depreciate at a slower rate.

#9: Create a Budget

This should be the first step you make when deciding to get out of debt and build wealth.

Without a monthly budget you’re essentially stumbling around in the dark.

Every dollar / pound that you earn should be accounted for. Create a list of categories that relate to your outgoings and set STRICT amounts for each one.

Stick to those amounts and then any remaining money that is left over can be paid off debts, paid off your mortgage, or invested.

A budget allows you to spend your money, but in a controlled way.

It’s also required if you want to achieve financial freedom.

Remember – Pay no attention to those around you who flaunt big houses, flashy cars, expensive clothes and luxury holidays.

The majority of the time it’s simply ‘smoke and mirrors’.

You see, debt can look good – But most of the time these people are broke and living from paycheck to paycheck, trying to keep up with payments whilst trying to keep up appearances.

So, don’t be like the Jones’s – Play the long game. The smart game, and financial freedom will be within your reach.

To your success

Andy Black