Establishing a debt-free lifestyle may be easier than you think. I embraced these three ideas at age 17 and have been happy with my decisions ever since.
You may not need to go to college, and other people will pay for it if you do.
Before you join the ranks of those staggering under student loans, take a minute to determine whether your desired field requires a college degree to start out. A certificate, apprenticeship or trade school, for instance, may be more highly valued in your field.
If you are certain that college is required, find ways to lighten your financial load. Talk to a recruiter — the military paid for my education. Apply for scholarships. Identify companies that offer tuition breaks as part of their benefits package, and earmark them as your most desirable employment options, even for entry-level positions. There is nothing to be lost by pursuing college once you can afford it, and that may not be immediately. Do you really want to figure out the answer to the “what do I want to do” question while paying a bank more than six figures to sit in classes you may not even enjoy?
If you can’t afford to write a check, you can’t afford it.
This idea has been the key to my ability to remain debt-free. I have proudly driven a used car, negotiated to take money off the sticker price once I was able to buy new vehicles, clipped coupons and skipped restaurants. Sure, my early-20’s weekends were a bit sparse at times, but I was glad that I lived frugally when the time came to buy a house, start a family and take a chance on a career move. With a bit in the bank and no debt to chip away at what I earned, I had full freedom to pursue exactly what I wanted.
You can live within your means and still have a good credit history.
While credit card companies work hard to convince us that we can’t build credit history without soaring card limits, the truth is that credit history is built over time. The first credit card I acquired had a limit of $300. I used it for every purchase, paid it off every week, and have continued that habit to this day. While I rarely carry a balance higher than $500 and have never taken a loan, my credit rating is sky-high.
It can be healthy to assume debt in two circumstances. The first exception is buying a house because it can be difficult to get flood, fire or other insurance if you don’t have a small loan and good credit history. The second is some types of business startups. As a service provider, I was eager to avoid startup debt for a simple reason — you become your own boss! You lose that freedom and control if forced to adapt goals, plans and methods of operating to make that startup loan payment every month. If you offer a service, stay within your means at launch by adapting or scaling down your offering at first or pursuing it part time. If you push a product, a small loan may be necessary to buy machinery or for an initial inventory purchase, but again, you can always grow.
Dismayed because you already have debt? Don’t be! Develop a plan, commit to paying it off as quickly as possible and adapt a “no more debt” approach once you do. Personally and professionally, the world is a more relaxed place when you don’t owe a thing to anyone.