It takes a lot of work to become debt-free and those lessons tend to stick with people who have struggled to find solid financial footing. But how come some people are able to gain control over their finances, while others continue to drown in past due bills and collections notices?
I can tell you one thing. It’s not income! Here’s an example:
Family 1 manages to pay off $20,000 in debt in two years on a $40,000 annual income.
Family 2 makes $100,000 a year but doesn’t make progress in reducing the same amount of debt.
Why is that?
Well, for one, Family 2 is obviously overspending! With a six figure income, they should be able to pay back their debt relatively quickly, but with so much money leaving the household, they are having trouble staying afloat. Their income is being eaten up by other things – maybe a high mortgage, credit cards, car payments, or just making poor choices like eating out all of the time. Whatever it is, it’s keeping them from making progress.
It’s a stressful way to live, but at some point, they’ll have to make some serious lifestyle changes if they want to get rid of debt. Debt-free people have it right, and there are 3 characteristics that many of them share.
- They get organized and follow a budget.
Debt-free people pay close attention to their finances. They budget carefully, know how much money is coming in, and how much is going out. Because they are keeping a watchful eye on their money, they are also able to make better financial decisions and manage their spending.
- They have learned the art of patience.
Debt-free people are willing to delay instant gratification. If they can’t afford something, they will forego it or wait until they have money to pay for it. Credit cards have made it so easy for people to buy things now and pay for it later. However, if you don’t use credit cards responsibly, it can lead to big trouble. To be debt-free, learn to wait, save up for what you want, and pay for it in its entirety.
- They are willing to change their lifestyle.
Getting out of debt is not easy, but people who are debt-free likely achieved the status because they are proactive about improving their financial situation. Whether they reduced debt on their own or obtained help from a debt relief company, debt-free people are willing to work hard and make sacrifices to achieve their financial goals.
If you want to get out of debt and stay debt-free, IT IS POSSIBLE – no matter how much money you owe! Even if you don’t think you display these characteristics, you’ll be amazed by how your perception of wants and needs change once you get started with the debt reduction process.
Don’t let your circumstances or income ever be an excuse. Remember, everyone has the ability to change their ways and work towards a better financial future!