It has almost been 3 months since I wrote this post about YNAB software.
I wanted to give you an update about how we are doing and why we think living debt free is so important.
We are still budgeting using the YNAB (You Need A Budget) software and we still LOVE it. We had some things happen in March that derailed us alittle and we used our Emergency Fund. Therefore, our money is now 12 days old, which isn’t good.
But you know what? That’s what an emergency fund is there for. Normally, in our old ways, we would have used credit cards for such an occasion.
In fact, I am happy to report that we haven’t used credit cards in 5 months (except for work expenses that will be reimbursed). That is a BIG DEAL for us.
So this month we will be trying to build up our emergency fund again. I like knowing that I have that little bit of cushion when things don’t go as planned.
I highly recommend YNAB for your household budget. They have free classes and help to get you going on budgeting and their point of view on money and budgeting is really REVOLUTIONARY. Check it out (affiliate link) at ynab.com. The first 34 days is free and then it is $5 a month for this awesome program.
Debt Free Living
The first time we focused on being debt free we were newlyweds in college. We both had come into the marriage with some debt (a car, wedding ring, a couple of credit cards). It wasn’t a huge amount, but enough that we had to get creative to get out of debt. We buckled down and paid off the debt in 2 years. It was time for my husband to go into Pharmacy school and I was pregnant with our first child. We were out of debt and it felt great!
Then, lots of things happened and slowly but surely we got into debt again. First, we moved to a new town for Pharmacy School. Then we had our first child, for which we had COBRA insurance (high premium insurance because he quit his job for pharmacy school). We used student loans to live off of and had 2 more kids soon after. I think you get the picture. We went back into debt and since then (16 years ago) we have never gotten completely out of debt again.
So why do we want to get out of debt? Why do we think it is important to live debt free?
7 reasons why living debt free is a goal worth working for:
1. Freedom to spend your money how you please.
Being in debt takes away the freedom to spend your money how you want. When you get rid of the debt, you have so much more money to spend and you determine how you spend it. Freedom from debt is freedom to live your life by your terms.
2. You can give more.
Being in debt decreases the amount you can give to your favorite charities or other people in need. This opportunity to help other people and give more will increase your happiness as well.
3. You can follow your dreams.
It is hard to leave your comfy job to follow your dreams when you have big bills hanging over your head. By being debt free you can more easily take a risk to start up that new business or travel the world. Those dreams don’t seem impossible anymore.
4. Less anxiety about bills.
Living paycheck to paycheck can really add stress and anxiety to your life. You may stay up at night trying to figure out what you should pay first or have to worry that a check is going to bounce before your paycheck goes in your account. Living debt free means those anxieties can go away and you can feel at peace with your financial state.
5. Turn paying interest into earning interest.
When you are in debt, you are paying interest to someone else to keep yourself above water. Once you pay off your debts, you can earn interest by saving the money you were spending on debt. People with healthy finances earn interest instead of paying it.
6. You realize stuff doesn’t make you happy.
Buying stuff to make you happy is a short term solution for a long term problem. Stuff won’t make you happy. Financial freedom and peace will make you much happier than stuff ever will.
7. Spend according to your priorities not your debts.
When debt claims most of your paycheck, paying back that debt consumes your budget and your life. When you get out of debt, you can spend more on the things that are important to you. Your priorities will show in your budget instead of your debts.
Resources to help you learn how to become debt free:
Dave Ramsey has a whole program to show you how to achieve this dream, but I would start with his book (affiliate link) The Total Money Makeover.
You Need A Budget can help you start a budget and stick with it (affiliate link) YNAB.
A debt-free life is something we are striving for again, after years of living paycheck to paycheck. It is not a quick fix to get there, but it will be worth it. Living a debt-free life to me means living without worry of our livelihood being taken away because we can’t make the payments. It means living intentionally and free.
Do you have struggles or tips about living debt-free? Please leave them in the comments below. Thanks!
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