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When it comes to personal finance, one of the most debated topics is whether it’s better to buy a home or rent. Both options come with their own set of benefits and drawbacks, and the right choice depends on your circumstances. Here, we’ll break down the arguments for both sides to help you make the best decision for your situation.

Why Buying a Home Might Be the Right Choice

For many, buying a home is an excellent long-term financial decision. Here’s why:

1. You Build Equity
   The biggest advantage of homeownership is that your mortgage payments help build equity in your property. With each payment, you own a little more of your home, rather than paying rent that benefits someone else. While owning a home does require maintenance and occasional repairs, such as replacing the roof, the money you’re spending is going toward an asset that will appreciate over time, unlike rent, which gives you nothing in return.
2. Real Estate is a Tangible Asset
   Unlike paper money, stocks, or bonds, real estate is a physical, tangible asset. A home is something you can touch, live in, and rely on, regardless of what happens in the stock market or the economy. Even in times of economic uncertainty, land and property maintain their value because they’re essential for living.
3. Pride of Ownership
   There’s a unique sense of pride and responsibility that comes with owning a home. It’s yours to take care of, and you have the freedom to customize it as you see fit. Moreover, owning a home means you won’t face the uncertainty of rent increases as you get older, making it easier to plan for the future.

Why Renting Might Be a Better Fit for You

Although owning a home is often a great financial decision, it’s not right for everyone. Here’s why renting might be the smarter choice for some people:

1. You Can’t Afford to Buy Right Now
   If you’re living in an area where home prices are high, like New York or San Francisco, buying a home might not be realistic. Even if you can technically afford the monthly payments, buying a home often comes with other hidden costs, such as property taxes, insurance, and maintenance. If your mortgage payments exceed 30% of your income, it could be a sign that homeownership may stretch your finances too thin.
2. You Move Frequently
   If you’re someone who enjoys moving every few years or is unsure about settling down in one location, renting could be a more flexible option. When you buy a home with a 30-year mortgage, most of your early payments go toward interest, which means you aren’t building equity in the property right away. If you sell the home soon after buying it, you could end up losing money, especially when factoring in closing costs and the possibility of the property’s value not increasing.
3. You Want to Avoid Debt
   The idea of owning a home outright may sound appealing, but it’s not the right choice for everyone. If you are focused on becoming debt-free, you might prefer to rent and save aggressively to one day buy a home with cash. While it may take time to save up, owning your home outright would eliminate mortgage payments, giving you complete financial freedom.

The Final Verdict: It Depends on You

Ultimately, whether you should buy or rent depends on your financial situation and life goals. If you’re in a position to afford a mortgage, want to build long-term wealth, and are ready to commit to staying in one place for a while, buying a home could be a fantastic decision. On the other hand, if you’re still working on saving up or need more flexibility, renting might be the better option.

Take time to consider your current situation, your future plans, and your financial capacity. The choice between buying and renting is not one-size-fits-all, but by weighing the pros and cons, you’ll make a decision that aligns with your personal goals.

Debt is an incredibly powerful force that shapes our lives in ways we often fail to recognize. While many may point to political leaders, powerful corporations, or military forces as the world’s main drivers, the truth is that debt holds a far greater influence over individuals and society. In this post, we’ll explore the far-reaching impact of debt and how it traps us into cycles of dependency.

The Grip of Debt

Debt works in ways that are uniquely potent. When someone is in debt, they are essentially bound by invisible chains, and the people who lend them money hold the keys. Those who owe money become subservient, and those who lend it gain control. This imbalance of power has consequences, as debt forces people into lifestyles they may not want to live, but feel they have no choice but to continue. Debt drives us to take the path of least resistance, as we are often too afraid to take risks or make changes in case we jeopardize our ability to meet our obligations. In the end, debt becomes an anchor that dictates every decision we make.

The Trap of Consumerism and Debt

Lenders thrive on our addiction to debt. They know that keeping us in debt means constant cash flow. Their business model depends on our inability to break free from the cycle. In a world where everything seems to be available on credit, lenders encourage us to take on more debt, often without consideration for our long-term well-being. This consumer-driven society pushes us to buy things we don’t need, using money we don’t have, creating a never-ending loop that keeps us tied to our debts. It’s not freedom, and it’s certainly not the life we dream of living.

The Consequences of Excessive Borrowing

The 2008 financial crisis should have been a wake-up call for many, but instead, it seems we’ve learned little from the lessons of that time. When we live our lives based on borrowed money, we create a fragile foundation that can collapse at any moment. Both individuals and governments continue to pile on debt, ignoring the risk it creates for future generations. If we don’t change the way we handle our finances, we are heading toward another financial disaster, and this time, we might not be able to recover.

Debt: A Loss of Control

Entering into debt means relinquishing control over your own life. Whether it’s a bank, a friend, or a government agency, once you owe something to someone, you’re no longer operating on equal terms. The lender holds the power, and while they may not always exercise that power, the fact that it exists creates an unhealthy imbalance. By taking on debt, we essentially hand over our autonomy, allowing others to dictate our financial future.

Breaking Free from Debt

The only way to regain control is to break free from the cycle of debt. The solution is simple but not always easy: pay as you go. Use cash whenever possible, limit your spending, and prioritize saving. It’s tempting to rely on credit for convenience, but true freedom comes from living within our means. Until we, both as individuals and as a society, understand the full consequences of debt and start making conscious decisions to avoid it, we will continue to risk losing everything we’ve worked for.

Managing finances as a couple can be tricky, and unfortunately, many couples make costly mistakes when it comes to their money. Whether it’s avoiding tough conversations or making impulsive decisions, these errors can lead to significant financial issues in the long run. Here are three of the biggest mistakes couples make with their finances—and how to avoid them.

1. Not Protecting Premarital Assets

Before tying the knot, it’s crucial to discuss your financial situation, especially if you have assets that you want to protect. A prenuptial agreement might not seem romantic, but it can save you from future headaches if things go south. For example, Greg and Claudia, a couple who had been married for 12 years, faced a painful situation when Greg received a $300,000 inheritance. Claudia became angry when the money was placed in an account in Greg’s name alone, and things quickly escalated. After Claudia took a portion of the marital assets and left for several months, Greg ended up losing half of everything when they reconciled—because they hadn’t discussed or set up any legal protection for Greg’s inheritance. The lesson here: discuss your assets, set clear expectations, and consider legal protections to safeguard what’s important to you.

2. Hiding Debt from Your Spouse

Debt is one of the most common sources of strain in relationships, and it’s crucial to be honest with your partner about financial obligations. Max and Leila, a couple who appeared to have it all, were hiding significant debt from each other. Leila had opened two credit card accounts using Max’s income information and maxed them out without his knowledge. When the truth came to light, their relationship was deeply impacted. Hiding debt or lying about money isn’t just dishonest; it complicates finances further and erodes trust. Transparency is key—always be upfront about any debt you bring into the relationship or accumulate during it.

3. Mismanaging “Free” Money

Sometimes, unexpected money comes into your life, whether it’s a gift, a tax refund, or even lottery winnings. While this may feel like a windfall, it’s essential to manage it wisely. Take Cameron and Shannon, who won $100,000 in the lottery. Instead of securing their financial future, they decided to spend a large chunk of it on unnecessary home improvements, including a $35,000 pool. The problem? They were planning to move in a few years, and these investments would be of little value in their new location. It’s easy to make impulsive decisions when extra money comes your way, but it’s important to take a step back and think about your long-term goals before spending. Save it, invest it, or use it for something that will benefit you in the future.

Avoiding Financial Pitfalls

Managing money in a relationship is about communication, trust, and thoughtful decision-making. Avoiding these common mistakes—protecting your assets, being transparent about debt, and managing unexpected funds wisely—will help set you and your partner on the path to financial stability and long-term success. By being proactive and making smart choices together, you can build a solid financial foundation for your future.

At some point, most people face debt in one form or another, whether it’s a mortgage to buy a home or a car loan to finance your vehicle. While some debt can be necessary for major life investments, much of it is the result of poor financial planning and mismanagement. The good news is that there are strategies to help you avoid falling into the debt trap in the first place. Here are some steps you can take to stay financially healthy and debt-free.

Create and Stick to a Budget

Managing your finances is a lot like maintaining a garden. If you stay on top of it regularly, it’s much easier to manage. But if you let things pile up, the task becomes overwhelming. This is where having a solid budget comes in. A budget allows you to track your spending, ensuring that you know exactly where your money is going each month. By understanding the balance between your income and expenses, you can prevent financial problems, including debt, before they arise.

Adopt a Frugal Lifestyle

Being frugal doesn’t mean making extreme sacrifices or living uncomfortably. It’s about being mindful of how you spend your money. Simple actions, like shopping around for the best deals or cutting back on unnecessary purchases, can lead to significant savings over time. The key is to make conscious choices that allow you to keep more of your hard-earned money in your pocket.

Use Credit Cards Wisely

Credit card debt can quickly spiral out of control if you’re not careful. The temptation to only make minimum payments and continue charging can be overwhelming, but it’s a dangerous path. If you’re not paying off your credit card balance in full each month, interest and fees can quickly turn a small debt into a huge burden. To avoid this, always aim to pay off your balance completely each month, or better yet, avoid unnecessary credit card charges altogether.

Explore Alternatives to Loans

In the past, if someone had an idea for a business, they’d typically head to a bank to apply for a loan. Today, however, there are many other ways to fund your ventures. Crowdfunding platforms like Kickstarter and GoFundMe allow individuals to raise money for their projects without taking on traditional loans. These platforms let people support your idea in exchange for small rewards or simply to help fund something they believe in, providing an alternative to taking on debt.

The Bottom Line

Avoiding debt is much easier than trying to dig yourself out of it once you’re deep in. By adopting good financial habits, like creating a budget, embracing frugality, using credit cards responsibly, and exploring alternative funding options, you can prevent yourself from falling into debt. If you do find yourself struggling, consider seeking help from organizations that specialize in debt management. Staying debt-free requires discipline and planning, but it’s worth the effort for your long-term financial security.

A few days ago, I shared how my minivan developed a giant crack in the bumper, which I suspect might have been Greg’s fault. Rather than keeping up with the latest trends and stressing over appearances, we decided to patch it up with some good old duct tape. Despite not criticizing anyone who finances cars, I received a comment that I found a bit defensive:

“Cars are for enjoyment. You can’t think it’s not okay to buy a car that you enjoy and drive every day of your life. You can’t take money with you when you die. Stop belittling people who buy things they want if they can afford it. I manage my $450 payment just fine, thank you very much.”

It seemed like a bit of an overreaction. But hey, I get it. Some people are really passionate about their cars. Still, I stand by my opinion: car payments just aren’t a great idea. Here’s why:

Why Car Payments Aren’t Ideal

Even if you have a great income and can technically afford it, having a large monthly car payment is rarely the best financial choice. Here’s why:

1. Car Payments Let You Buy What You Can’t Really Afford

The primary problem with car payments is that they allow people to buy things they can’t truly afford, stretching payments over several years just to make it seem manageable. I can speak from experience here. In my early twenties, I bought a brand-new Mitsubishi Galant for nearly $25,000. Could I afford it? Absolutely not. At the time, I was working at a group home for $8 an hour. Looking back, it was a terrible decision, but I justified it with the monthly payment.

2. You’ll Never Own Anything

One of the big misconceptions about car payments is that they somehow help you “own” your car. Sure, you may get a good interest rate and plan to invest your savings elsewhere, but most people don’t stick to that plan. I’ve seen countless friends pay off their car loans, only to trade the car in for a new one, getting back into more debt. It creates a never-ending cycle of car payments that becomes normalized, even when it’s clearly not the best financial move.

3. Cars Depreciate Quickly

When you drive off the lot with a shiny new car, it starts losing value almost immediately. The $500 monthly payments might not feel so bad at first, but think about it: in five years, the car could be worth a fraction of what you paid for it. You’ve essentially committed to a huge monthly payment for an asset that’s constantly losing value. The idea of paying interest for something that depreciates so quickly doesn’t sit well with me.

4. There Are Better Ways to Spend Your Money

I’ve never been a fan of paying bills, and I’d much rather put my money to use in ways that benefit my financial future. By avoiding a car payment, I’m saving anywhere from $300 to $500 a month. That’s money I can use for things like:

• Investing in index funds
• Saving for my kids’ education
• Building my writing business
• Hosting events for my community
• Or simply enjoying more experiences with my family

Honestly, there are so many better ways to spend that money than committing it to a car payment.

The Bottom Line

I’m not here to shame anyone who’s comfortable with their car payments, but for me, it’s just not worth it. I’d much rather drive an older, reliable car and save that monthly payment for things that will contribute to my long-term financial well-being. If and when I need a new car, I’ll pay in cash for a used one. In the end, it’s all about being mindful of where your money is going and making decisions that align with your financial goals.

Have you ever stopped to wonder why so many people in America find themselves stretched thin by car payments? Not long ago, I came across a post about how local dealerships are now offering six-year car loans for cars like the Honda Civic. I had to take a step back and think, “Six years for a car payment? That’s nearly as long as my daughter’s entire childhood so far!”

Car loans, especially long-term ones, seem to be more common these days, but they also highlight an uncomfortable truth: Americans are often financially strapped due to their car expenses.

Why Are People Getting Trapped by Car Payments?

Just after reading that blog post, I came across an article on MarketWatch about how lower-income families are increasingly relying on car loans to afford basic necessities, including transportation. Initially, I felt some empathy, but then I read a startling statistic. According to the Wall Street Journal, the average car loan term hit 66 months, marking a historic high. And to top it off, nearly 25% of new car loans in the first quarter of 2014 were between 73 and 84 months. These extended terms are not just a trend; they’re becoming the norm.

The article went on to reveal some jaw-dropping figures: the average amount financed for a new vehicle loan had reached $27,612, and the average monthly car payment had climbed to $474, up from $459 the previous year. It’s no wonder so many people are struggling financially. With these kinds of numbers, it’s clear that people are being lured into taking out massive loans to cover the cost of their vehicles.

Why Are We Choosing to Be “Car Poor”?

Here’s the reality: If the average car payment is $474, it makes sense why so many families are having trouble making ends meet. When you’re borrowing over $27,000 to finance a car, it says something about our country’s priorities. Despite the focus on vehicles, retirement savings are lagging behind— the average 401k balance for people aged 22-34 is just $16,500, and for those aged 35-48, it’s only $63,600.

When you’re putting so much money toward car payments, you’re sacrificing long-term financial health, and that’s a dangerous game.

How to Avoid Becoming “Car Poor”

As someone who isn’t particularly fond of cars and doesn’t rely on one for daily commuting, I recognize that it’s easy for me to downplay the importance of a car. But I know that many people do need a reliable car for work and everyday life. That said, the idea that you have to have the newest, flashiest car is a common misconception. You don’t need all the bells and whistles, like heated seats or a high-end stereo system. If you want to avoid the “car poor” trap, here are a few strategies:

• Understand That Cars Are Depreciating Assets: New cars lose at least 20% of their value in the first year alone. That shiny new car smell isn’t worth the financial hit.
• Consider Buying a Used Car: Used cars are often a much more affordable option. If you’re unsure where to start, Jacob from IHeartBudgets.net has an excellent guide on how to buy a used car without falling into a trap.
• Buy an Efficient, Budget-Friendly New Car: If you must have a new car, there are many low-cost options that can serve you well. For instance, a new Ford S Sedan costs around $16,810—over $10,000 less than the national average!
• Focus on Your Financial Health, Not Appearances: A new car may seem like a status symbol, but it’s not worth compromising your long-term financial security. Ask yourself, “How would my life improve if I didn’t have a car payment hanging over me?”

To give some context, I drive a 2007 Dodge Caravan. Sure, it’s a little worn, with some duct tape on the front, but it’s reliable, comfortable, and—most importantly—paid off. While I might not drive a fancy car, I can walk into any store knowing that I’ve made a smarter choice for my finances.

Debt is something many of us have faced, and for some, it can feel like an endless struggle. I spent years making poor financial decisions, unaware of the long-term consequences. In my younger days, I didn’t think much about debt or saving for the future. I believed I’d make big money eventually, but the reality was much different.

I made some foolish choices—like financing a $25,000 car when I was making just $8.50 an hour—and didn’t understand how those decisions would affect me later. Fast forward to my marriage, and we still carried student loans, car loans, and home improvement debt. That’s when we realized we had to change.

Here are the lessons I learned while digging my way out of debt:

1. Tracking Your Spending Is Essential

Before we turned things around, I had no idea where our money was going. We were making decent money, yet we weren’t saving anything. I was shocked when we started tracking our spending. Once I saw exactly how we were using our money, it became clear that we were overspending in several areas, like food and entertainment. Tracking our spending was eye-opening and the first step in regaining control over our finances.

2. Stop Digging When You’re in Debt

One of the hardest realizations is that the longer you let debt grow, the harder it is to get out of it. Debt has a way of numbing you to the reality of your situation. When I was carrying around $20,000 in student loans, I didn’t see the harm in continuing to rack up debt. But, the longer you ignore the problem, the longer it will take to pay it off. The best thing you can do when you’re in debt is to stop adding to it. This was the most important step we took in our journey to get debt-free.

3. Small Changes Make a Big Difference

When you’re struggling with debt, it’s easy to think that small savings don’t matter. But, as we found out, every little change adds up. Cutting back on small expenses like subscriptions and shopping smarter made a noticeable difference in our budget. We also started side hustles to bring in extra income, which helped us pay off our debt faster. Even though each change seemed insignificant at the time, together they made a huge impact on our financial situation.

4. Don’t Care What Others Think

In my younger years, I was easily influenced by what others thought about me and my lifestyle. This mindset often extended to my financial decisions, where I would spend on things I didn’t really need, just to keep up with the expectations of others. Eventually, I realized that the only person who needs to be happy with my financial choices is me. Once we stopped worrying about keeping up with others and focused on our own financial goals, we were able to make decisions that truly benefited us.

The Most Important Lesson

The most valuable lesson I learned is that being in debt is a huge barrier to living the life you want. Debt can limit your options and hold you back from pursuing dreams like travel, a career change, or going back to school. It took time, effort, and a shift in mindset, but getting out of debt is possible. You need to commit to making changes, whether that means cutting back on expenses or finding ways to bring in extra money.

Getting out of debt is an ongoing process, but the most important part is to stop relying on others and take action yourself. It all starts with changing your mindset and making the decision to take control of your financial future.

At some point, most of us have faced the burden of debt. Whether it’s credit cards, student loans, or car payments, dealing with debt can be overwhelming. However, getting out of debt is not only possible, but it’s also achievable with the right mindset and actions. Many people find their way out through a combination of cutting back on spending and finding extra income. But here’s the thing: it’s not just about wanting to be debt-free. The real challenge is changing your mindset and taking responsibility.

Here are 7 important realizations that will help you get started on your debt-free journey:

1. No One is Going to Fix This for You

Dreaming of a windfall like winning the lottery or getting an unexpected inheritance won’t solve your problems. While it’s tempting to hope for a miracle, the reality is that no one is coming to rescue you. Whether it’s through a surprise check in the mail or a chance discovery, expecting someone else to take care of your debt is a dead-end path. The key to getting ahead is taking action yourself. You are the one who has the power to change your financial situation.

2. You Can’t Afford Everything

It’s tough to admit, but you can’t buy everything you want. Modern advertising does an excellent job of convincing us that we deserve luxury and convenience. However, this mindset is a trap that leads many people deeper into debt. Recognizing that you can’t afford everything you desire is a crucial first step toward getting back on track financially. Understanding what you can and can’t afford will allow you to make smarter decisions moving forward.

3. You Need to Cut Your Spending

One of the simplest, most effective ways to pay off debt is to reduce your spending. While earning more money can help, cutting unnecessary expenses is often the quickest way to free up cash. When you’re drowning in debt, the first priority should be to look at your budget and eliminate anything that isn’t essential. Learning to live with less for a while can make a huge difference.

4. Your Debt Is Your Responsibility

It’s easy to blame others for our financial troubles, but the truth is that your debt is your responsibility. It’s important to accept that you have control over your financial future and stop pointing fingers. The sooner you take ownership of your situation, the sooner you can start making positive changes. No one is going to solve this for you; it’s up to you to make the necessary adjustments to get back on track.

5. You Can Live Without Certain Things

Many of the things we think we need are actually optional. Expensive smartphones, cable TV subscriptions, or weekly outings might feel like necessities, but in reality, they’re luxuries. If you want to get out of debt, you need to prioritize. For a while, you may need to live without some of these non-essential items. The good news is that this doesn’t have to be forever. Once your debt is under control, you can reintroduce these comforts back into your life.

6. Time Is Running Out

Procrastination might feel comforting, but when it comes to debt, delaying the inevitable only makes things worse. The longer you wait, the more interest you’ll accrue, which means you’ll end up paying much more in the long run. The longer you’re in debt, the harder it becomes to catch up. Taking action now can help prevent your situation from worsening. Time is a critical factor, and acting sooner rather than later will save you money.

7. Things Will Get Better

The process of paying off debt might feel like a sacrifice at first, but it’s important to remember that it’s temporary. Once you start to see progress, you’ll feel more in control, and your financial outlook will improve. Cutting back on non-essentials doesn’t mean you’re giving up everything forever. Eventually, you’ll be able to afford the things you love, just without the stress of debt hanging over you. The sacrifices you make now will pay off in the long term.

The Bottom Line

Getting out of debt isn’t easy, but it’s absolutely possible with the right mindset and strategy. It starts with acknowledging the hard truths, accepting responsibility, and making the difficult but necessary choices to improve your financial situation. If you’re ready to make a change, remember: it’s not about luck or waiting for someone to help. It’s about taking control and putting in the work. The sooner you start, the sooner you’ll experience the relief of being debt-free.

Debt can feel like a heavy weight, and for many, it becomes an overwhelming cycle of trying to catch up month after month. But in our attempt to find solutions, some people fall for the worst advice—taking out loans to pay off debt. I recently received a piece of mail that illustrates this perfectly, and it’s a prime example of why borrowing more money is often the worst way to tackle your financial problems.

A Classic Debt Trap in My Mailbox

The letter that got me riled up was from a lender offering a loan to “get rid of credit card debt in as little as 36 months.” At first glance, it sounds promising. But as I read further, the details were infuriating. Not only was the offer to borrow up to $40,000, but the interest rate could climb as high as 29.99%.

What’s even worse was the sneaky pitch that allowed people to borrow for not just debt repayment but also for “other expenses like remodeling your kitchen, a family vacation, or whatever your needs might be.” This is a classic example of debt consolidation gone wrong. Instead of helping people get out of debt, these types of loans encourage them to take on more debt than necessary, which only deepens their financial struggles.

The Problem with Debt Consolidation Loans

Here’s the harsh truth: Debt consolidation loans and balance transfers are only helpful if they actually save you money. For instance, if you’re paying 24.99% interest on a credit card and transfer that balance to a card offering 0% interest for an introductory period, it can work. But even then, you need to factor in the balance transfer fee, usually around 3%.

However, borrowing more money to pay off existing debt, especially with a sky-high interest rate, is never the answer. In fact, it’s a strategy that only makes things worse in the long run.

How to Get Out of Debt Without Borrowing More

The best way to get out of debt is actually the simplest—and the one that requires the most discipline: stop borrowing more money. Here’s how you can do it:

1. Track Your Spending

The first step to gaining control of your money is understanding where it’s going. Start tracking every dollar you spend, and I guarantee you’ll be shocked at how much is wasted on things you don’t need. It’s a painful process at first, but as my husband Greg often says, “To stop sucking, you first have to know you suck.” Recognizing where you’re overspending is the first step to making better choices.

2. Create a Budget

Once you know where your money is going, the next step is to create a budget. For us, we use a zero-sum budget, where we base our spending on the previous month’s income. It’s a simple system, but it works. List out your essential expenses (like bills and groceries) and compare them to your income. Once you know where your money is going, you can cut out unnecessary spending and redirect those funds toward paying off your debt.

3. Start Paying Off Debt

Once you’ve freed up some money by tracking your spending and sticking to your budget, it’s time to start paying down your debt. Whether you choose the debt snowball method (paying off your smallest debt first) or the debt avalanche method (starting with the highest interest rate), the important part is simply to start. Set up a plan and stick with it. The key to paying off debt is consistency and discipline.

The Bottom Line

Borrowing more money to get out of debt is one of the worst financial decisions you can make. While it may seem tempting to consolidate debt with a new loan, the reality is that it often leads to more debt and higher interest rates. Instead, focus on cutting your expenses, tracking your spending, and developing a plan to pay down your existing debt.

It may not be the fastest solution, but it’s the most sustainable. The best way to get ahead financially is to avoid accumulating more debt and take control of the money you already have.

Being in debt can be an overwhelming experience. The constant worry about how to cover bills and live within your means can take a toll on both your financial and emotional well-being. One reader recently reached out, sharing their frustration with living paycheck to paycheck, and asking how they could break free from the cycle.

The desire to feel financially stable, to not have to worry about the next bill, and to live comfortably is something we all strive for. Here’s how my family broke free from debt, and how you can do the same, without relying on a windfall or hitting the lottery.

Getting Ahead Without a Lucky Break

Even though my family has been free from debt for years now, I still remember the struggle of trying to get ahead. I recall the frustration of working full-time and still not making progress financially. It felt like we were working harder just to stay in place, and we couldn’t quite figure out where all our money was going.

But once we decided to change our approach, things started to look up. Here’s how we dug ourselves out of that hole:

1. Track Your Spending

The first thing we did was start tracking every penny we spent. After living paycheck to paycheck for a few years, we realized that we needed to take control of our finances. We went back through our bank and credit card statements for the past two months and were shocked by what we found. We were spending over $900 a month just on food for the two of us and our baby. Add to that the money we wasted on entertainment and impulse buys, and we could see that we were living way beyond our means.

2. Cut Out the Unnecessary Expenses

Once we recognized how much we were wasting, we knew we had to make some serious changes. This meant cutting out non-essential things like cable TV, dining out, magazine subscriptions, and any unnecessary purchases. We also became more mindful of how, when, and where we spent money.

3. Create a Zero-Sum Budget

After cutting out the excess, the next step was to create a realistic budget. We discovered a method called zero-sum budgeting, which involves allocating every dollar of your income to a specific expense or saving goal. For us, this was a perfect solution since our income was irregular. Every month, I would create a budget based on the previous month’s earnings, accounting for fixed expenses like bills and variable expenses like groceries.

4. Use Extra Money to Pay Off Debt

With the extra money we freed up by cutting out non-essential expenses, we started putting it toward paying off our debts. We focused on high-interest debts first, such as credit cards and student loans, then worked our way down to car loans and other smaller debts. By prioritizing the higher-interest debts, we were able to reduce the amount we paid in interest over time and pay off everything much faster.

5. Stay Committed

The process wasn’t always easy. There were times when we wanted to fall back into our old habits, but we resisted. We kept putting every extra dollar toward paying down our debts, and eventually, there was nothing left to pay. At that point, we redirected our funds toward more exciting financial goals, such as saving for college, building investments, contributing to retirement, and even enjoying life with occasional travel.

Today, we’re in a much stronger financial position. We save a large portion of our income, and the constant worry about money has been replaced by excitement for the future. All of this happened without winning the lottery—just simple, disciplined steps that anyone can take.

The Bottom Line

If you want to get out of debt and start building wealth, the key is either increasing your income or cutting your expenses. Since earning more money might not happen overnight, the best place to start is by reducing unnecessary expenses. Once you’ve freed up some cash, use that money to pay down your debt instead of spending it on more things.

By following these simple principles and staying committed to your plan, a debt-free life is entirely achievable. The longer you wait, the harder it will be, so take action now to get started on your path to financial freedom.