If you’re like most baby boomers, you’ve probably experienced the feeling of having too much credit card debt. Maybe you’re carrying a balance from month to month, or perhaps you’ve been hit with an unexpected late fee or two. Either way, credit card debt can feel like a weight around your neck.
It’s a stressful way to live, especially if you are retired, or want to retire.
Lighten the load. Get rid of debt. And experience the freedom of debt-free living.
Tips for getting out of debt.
There’s no magic trick to getting out of debt. Use a debt repayment plan that works for you. You can do it with “baby steps”, or develop your own method for resolving your debt.
In our case, we sold our house and equipment to pay off our loans. After that, we moved to another state and decided we didn’t want to carry the burden of debt ever again.
Everyone has the freedom to choose. And we’ve found it very liberating to live on a cash basis.
How can I Iive my life without debt?
A common misconception is that you can’t have an extravagant lifestyle if you pay off debt and live on a cash basis.
I suppose that’s true based on the meaning of extravagant. The definition of extravagance is exceeding the limits of reason or necessity.
So, if buying stuff you think you need, on credit, brings you joy, debt-free living probably isn’t your cup of tea.
With that said, practical money management, or living on a cash basis, is not being a penny pincher or doing without. To the contrary; a debt-free lifestyle is about value.
Value means you’re not wasteful with your money. As you practice paying only for what you value, you free up resources for other things you want and need.
And those things can be expensive and luxurious.
This approach works for everyone. It’s simply a matter of deciding to do it.
The benefits of living debt-free in retirement.
Having bills you can’t pay causes anxiety. The opposite of that is a debt-free, stress-free lifestyle.
Instead of feeling like you’re drowning in a sea of debt, your head’s above water. You feel emboldened. With less worry about money, mental health improves.
After basic needs are met, you’re free to save your money or spend it as you see fit. No more worrying about creditors.
Your credit score improves because you’re not paying only the minimum required payments on credit cards.
You’ll sleep better when you’re debt-free. I personally experience greater peace of mind living on a cash basis – one less thing to worry about upon retiring.
With less financial worry about bills, you can focus your energies on other retirement plans…passive income, travel, moving, and so on. Controlling debt provides greater opportunities.
Tips for living debt-free.
There’s a natural high that everyone experiences when they are debt-free. I would say that the following tips are common knowledge. However, they are the basic foundation for living debt-free in retirement.
No. 1 – Buy only what you can afford to pay for in cash.
Develop a cash mindset. Live within your means. If you can’t pay for it today, don’t buy it. Buy what you have cash for at the time of purchase.
No. 2 – Pay off credit card balances each month.
If you use a debit or credit card for convenience, don’t carry a balance. Use a card that provides the biggest cashback incentives. Apply the cashback to your next statement.
No. 3 – Comparison Shop.
To prevent overspending, decide what you need before you shop. The goal is to buy quality for the best price. Cheap is rarely better.
No. 4 – Avoid Impulse Purchases.
Splurging is okay. It makes us feel good to treat ourselves occasionally. Little pleasures and luxuries make life worth living. However, too many impulse purchases can take your cash basis lifestyle off track.
No. 5 – Keep tabs on memberships and subscriptions.
Do you have club memberships or magazine subscriptions that you’ve forgotten about, or don’t use? It’s a waste if you’re not receiving benefits from them. Also, it may be time to reevaluate insurance policies or smartphone contracts.
No. 6 – Be Prepared.
Avoid the “put it on the credit card” trap. I know we hear this all the time. But, preparing for the unexpected helps you stay on track with a debt-free lifestyle. If you hit a bump in the road, a few months of cash and storable food provide peace of mind. You never know when you’ll need a new major appliance, or can’t get out because of illness, weather, and so on.
The first goal is to pay down debt with a method that works for you. Living on a cash basis doesn’t mean that you are cheap or don’t have luxuries. It simply means that you are not wasteful, yet buy what you value. You buy what you can afford at the time of purchase. Credit cards are used for convenience, but you don’t carry a balance and incur interest charges. One of the major benefits of living debt-free is less stress. With less financial worry, you can focus your energies on your retirement plans.
Banner Photo by SHVETS production: https://www.pexels.com/photo/couple-crossing-the-road-8972269/-
Related Articles You May Like:
- What is it Like to be Debt-Free? 8 Traits of a Debt-Free Retiree
- How Much Money Should You Have to Retire? Try Value Based Planning
I hope you find these tips for living debt-free in retirement useful. Please feel free to comment below! And before you go, please take a moment to subscribe to our newsletter, and like us on Facebook!