How to Cultivate the No-Debt Mindset
Do you have debt and feel stuck? Do you want to take the next step toward financial freedom and be debt-free? In this post I explain why our finances can affect our health, the no debt mindset, and how being debt-free can promote financial freedom.
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Financial Health is Vital
When you take a look at the Wellness wheel, some of the wellness categories are obvious. We certainly consider physical health to be part of wellness, and the current day mental health movement is promoting emotional and intellectual wellness, but some of the categories – say ecological wellness or financial wellness – don’t make sense initially.
How could my finances contribute to my health?
Financial health has EVERYTHING to do with your overall wellness.
Finances Provide Basic Needs
Take a moment and think about how the average person uses money.
At the very basic level, money is used to purchase our necessities.
If we don’t have enough, we can’t buy the things we need. If we have too much without a plan, we often get distracted and purchase things that aren’t good for us.
As my husband and I have gone on the financial journey together, we’ve discovered both ends of the spectrum at times. It’s been anxiety producing when our grocery budget was less than $30 per week. However, sometimes we end up with extra money that we didn’t plan for and typically spend it on fast food impulse purchases. That’s not good either.
Financial Health Affects Overall Wellness
Consider the other aspects of wellness too – social, intellectual, physical, etc. Holistic wellness requires excellent understanding of finances.
Want to go grab coffee with a friend to promote social wellness? You’ll need ten bucks for your venti Frappuccino.
Want to go back to school for higher education to promote intellectual wellness? You’ll need ten thousand bucks for your degree.
Even something as simple as physical wellness requires you to have good control over your financial health. Everyone needs basic nutrients coming from whole foods (not food products), and some decent health insurance for when we inevitably get sick.
Moreover, our careers affect how we perceive ourselves. Think about it. What’s the first thing you say to someone after you meet them?
“What do you do for a living?”
Many of us have a solid answer to that question, but consider how you might feel if you’ve been recently laid off, or you’re in a job that isn’t fulfilling, or you don’t even know what direction you want to take your career. I know I’ve cringed when I haven’t known how to respond. It’s awkward.
People expect you to have your elevator pitch ready for them, but if you’re dissatisfied with your current employment, the ensuing conversation is uncomfortable and often leads to self-talk like, “Wow. What am I even doing with my life” or “Will my family and I ever be able to make it without this position?”.
If you value your holistic wellness, you must consider financial wellness as integral to your overall health.
The American Mindset
According to Dave Ramsey, creator of the 7 Baby Steps, 78% of Americans live paycheck-to-paycheck. Almost EIGHTY PERCENT of Americans rely on their current income to afford their current lifestyle, don’t have a savings for emergencies, and aren’t saving for retirement.
The majority of Americans are not intentional and proactive about their financial health. Are you?
The American financial mindset does not contribute to holistic wellness because it does not prepare for inevitable emergencies, does not allow for financial advancement, and does not put the individual in-control of their wellness.
So. If you’re in the American Financial Mindset, what can you do? Let’s take a look at the No Debt Mindset instead.
Cultivate the No Debt Mindset
The No-Debt Mindset prioritizes YOUR control over YOUR money. Instead of having school payments or credit card payments that you have to give a minimum to every month, you can put your money toward whatever you like without feeling guilty for spending the money. Maybe it’s that coffee date we mentioned earlier, or maybe it’s a larger purchase like a family trip.
Whatever your purchases, with the No-Debt Mindset, YOU have control.
What does the No Debt Mindset Actually Mean?
About right now you might be saying, “Okay, I get it. No debt is important, but what does no debt actually mean?
Fervent attempts to pay off everything minus the house.
That’s any debt. Medical, educational, credit card, cars, anything. You name it, we’re going to pay it off as fast as possible because it’s going to keep you from pursuing your personal goals.
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In a no debt mindset or the debt free mindset, your primary goal becomes putting as much income toward your debt as possible, while spending as little as possible on everything else. This change in mindset might mean that you eat Ramsey’s famous “beans and rice, rice and beans” recipe for a while, but this is only TEMPORARY.
Temporary sacrifice for long-term gain. AKA the No-Debt Mindset.
How to Cultivate the No Debt Mindset
If you’ve been living the American Financial Mindset for as long as you can remember, it’s going to take a mental change to get you ready for the No Debt Mindset. I mean, they’re completely different.
The American Mindset says “Give me what I want right now. I don’t care about the future consequences.”, while the No Debt Mindset (debt-free) says, “I’m willing to give up what I want right now, so that I have better consequences in the future”.
The No Debt Mindset isn’t for the faint of heart. It’s definitely difficult. But it’s feasible for most.
Like what you see?
Recognize your potential for freedom
If my husband and I can live well on income 50% below the median American salary (AKA less than $30,000) and pay off $16,000 in school debt in our first year of marriage, you can do it too.
Once we paid off our debt, we increased our food budget, started going out to restaurants, saved for anniversary trips, you name it. We had financial freedom and felt a sense of relief.
We no longer had to worry about paying a minimum payment because we didn’t owe money to anyone any longer.
YOU CAN HAVE FINANCIAL FREEDOM TOO!
The hope for your freedom potential is what will spur you on when things get difficult. When I wanted to get coffee with friends, or my husband wanted a milkshake, it was difficult to say no, but we reminded ourselves that the sacrifices we were making during the first year of our marriage would provide us financial freedom for the rest of our lives.
Now, when I want to go out with friends or my husband and I want ice cream, we can go do it because we have the money allotted in our personal funds to meet our needs AND our wants, and we don’t have debt growing over our shoulders.
When you recognize your potential for financial freedom, you feel empowered to make sacrifices needed to become debt-free.
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Once you’ve recognized the importance of the No-Debt Mindset and recognized that you are capable of cultivating it, you need to take actionable steps to become debt free.
The first thing I recommend is to create a budget. In my post Five Steps to Make Your Budget Work for You, I discuss how a budget can be helpful and how you can set up your budget so that you are in control of your money and how it’s used.
The budget is the first step to financial freedom because it allows you to make intentional steps to make your money work toward your personal goals. A budget teaches you how to use your money for your own personal wellness.
If you want to take your budgeting one step further to save even more money (AKA pay off your debt faster), I recommend meal planning. When you meal plan, you only purchase the food that you need in the quantities that you need it.
Meal planning eliminates impulse and wasteful food purchases. I love these meal planning sheets to help us plan for the week because they allow you to plan both your meals, and your grocery list in the same place.
The meal planning sheets are perfect for families with kids, or sending your husband to the store. Never again will the husband or kids ask “What’s for dinner” because the meal planner is on the fridge! You can send your significant other to the store with your ENTIRE list that conveniently tears off the main planner page, and they won’t have to remember the three extra things you reminded them to get as they walked out the door.
If you want even more information on budgeting and financial planning, I highly recommend Dave Ramsey and his Baby Steps. His book is what got my husband and I through our first year of marriage and into the financial freedom we now have just a few months later (we’re only in our third year!).
I don’t know where we would be without Ramsey’s guidance. Still in debt for sure.
Ramsey is also a big proponent of a no credit-card system (because credit cards are just revolving debt) and teaches that you should only use cash, so that you can only spend what you have.
While my husband and I did not adhere to this part of Dave Ramsey‘s program, we do recommend it for people who tend to overspend on their credit cards. This envelope system is a cute way to organize and label your cash once it’s budgeted for the month. I also like this envelope system as well.
Financial freedom through being debt free is possible with determination and a good budget. It requires a change in mindset and behaviors that are somewhat counter culture, but will allow you to be in control of your money and your finances for the rest of your lives.
What steps have you taken to pursue debt freedom and improve your holistic wellness?
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Lat Updated: September 12, 2020