If you’re looking for the key to financial flexibility in our family, it starts with debt.
NO debt, that is.
Do you feel the weight of that lease on your car or student loan payment each month? Or maybe you racked up some credit card debt that just keeps piling on? What would your monthly budget look like without debt payments?
Let’s talk about how not having debt is truly the beginning of having financial flexibility.
No Debt Equals Financial Flexibility
We’ve never made a lot of money, but we have always stayed more than afloat with our finances. Are there times when we desired a higher monthly income? Of course! But low income is still income and it’s easy enough to live off of without debt bills each month (besides a mortgage).
A debt-free lifestyle leads to financial freedom. Financial freedom leads to flexibility in almost every area of life.
You might be thinking, you sound a little like Dave Ramsey. To that, I would agree, but it’s hard to go the distance with a Dave Ramsey mindset considering so much of his message is just about getting out of debt.
Hello, we LOVE credit cards when used correctly!
In each new season of finances, it’s important to re-evaluate. Do you have debt? It’s time to cut the extra shopping on clothes and coffee. Are you lacking an emergency fund? Use any excess you have from last month’s income to begin building up an emergency fund. Want to save for a vacation? Consider what you can sell or what services you can offer to others to make some extra cash. Maybe even pick up a few side hustles.
But once the debt is gone and the emergency fund is saved… you’re flexible and free.
You’re not tied to making such a high monthly income without the debt. I’ve seen this play out in many scenarios in our life. For starters, my spouse and I BOTH quit our jobs, adventured out on a six-month road trip, and now live solely off of side hustles. There is no way we could have done any of that with car payments, student loans, or credit card debt.
Our family spent about $10,000 on a six month road trip. We saved up some money, plus worked side hustles on the road for extra income. This trip would have been impossible if we had loads of debt under us.
Without debt, we don’t have to worry when car issues come up or medical bills are due. We’re set up for this. We’ve planned for this. We’re free to spend what we’ve saved and slowly build it back up in the months to come.
A Powerful Picture of Debt
Below is a powerful picture of debt and the idea of a life without it.
This graphic actually focuses on investing, but it’s equally applicable to dealing with debt. The money Sam is paying toward a car, Sarah is investing. She can go on a vacation or buy new shoes all because of the financial wisdom she practiced years prior.
What now?
Do you feel the weight of monthly debt payments? Start by making a monthly budget. My friend Delany will teach any mom (or human) how to easily start budgeting. My own recommendation for you is to check out my frugal lifestyle page to see where you can lower your expenses and start paying off that debt. Specifically, focus on cutting down your grocery bill, stop paying for things you don’t NEED, and make more passive income. It’s time to get control on your spending is step one.
If you are reading this and you don’t have any debt, KEEP IT UP. Enjoy that financial flexibility and try to maintain a frugal lifestyle so you can extend your financial flexibility as long as possible.
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