3 Ways to Live a Debt Free Life

There is one thing the majority of us are guilty of and often times it happens so fast, we don’t even realize it until it is too late--over-extending ourselves financially. It starts off when we are kids with a shiny new bike or the latest (and most expensive) video game system; and it extends all the way into adulthood with our houses, cars, clothes, and vacations.

Madonna's old statement still rings true over twenty years later-- we all just live “in a material world,” and because of it, most of us are always left desiring something that is just out of reach. Whether you are living on your own for the first time at college or starting over again later in life, it’s important to stay grounded when it comes to your finances.

One of the greatest positions you can put yourself in life is to be debt free; it simply means you have the financial flexibility to have options that people who are in debt unfortunately do not. It may seem like a daunting task, but living debt free starts on a basic concept--being smart enough to avoid accumulating an owed amount that is greater than the amount you can afford.

Here are three expert suggestions that can keep you and your family out of harm’s way on the proper path to financial freedom.

Be Smart with your Credit Cards- While there is nothing more dangerous than a freshly freed college kid with a credit card, letting our cards get the best of us is something that is certainly not solely reserved for the youth of the world. That is why a credit card should be looked at as a means to pay for emergencies much more than a false sense of purchasing ability.

Additionally, it is wise to look into the many different options available to you as different cards offer different reward programs; still, experts recommend that it is best to use a card with benefits for big purchases only when you have the necessary funds elsewhere to pay for it. Remember, extending yourself, even for one billing cycle, can subject you to significant interest penalties.

There have been many studies done to show that swiping a card receives much less consideration then parting with cash; there’s just not as much of an attachment to it. Do not be one of the many who blindly swipes each month with no concept of the final bill until it hits their inbox.

Build Your Savings Early and Contribute Often – It’s always smart to start putting a little money to the side for savings the moment you begin to consistently earn a paycheck. If you are younger, it’s typically a fund for summer vacation or books in college, but as you get older, the concept of savings evolves and takes on a whole other level as both a retirement and emergency fund.

While it is not only fun, but important to live in the now and enjoy life, you should also begin pooling together anything you can spare to start a proper account as soon as possible. From there, set aside a small amount every other paycheck or bonus check to help grow the fund. Remember to keep in mind the most important rule of maintaining a savings account, though; the fund is for savings, not for spending!

Know Your Realistic Price Range for EVERYTHING- Whether it is the clothes you wear, the car you drive, or even the amount of times you go out to dinner, it is absolutely imperative that you know your true limit for spending. It’s easy to get carried away and follow trending styles or overdo it while out at the bar or at the game with your buddies, but haphazardly spending money can quickly put you in a financial bind.

That is why it is very important to establish a base line cost for common items and an understanding of certain situations, if any, allow for you to deviate from them. It’s okay to treat yourself on occasion, but don’t let it become too much of a habit until you can fully afford to do so. Playing it smart during routine purchases will allow you to keep more money to the side for big one off situations like buying a home.

BALANCE