How to live
A Debt Free Life
How To Live Debt Free | 8 ways we stay debt free
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hey guys it's Sarah here and today's
video is sponsored by buns and today we
are gonna be talking all about debt-free
living Wow it has been awhile since I
have talked about this and I don't know
why because it's one of my favorite
topics that I'm so passionate about for
those of you who don't know my husband
and I actually paid off all of our debt
about five years ago and we love this
lifestyle and we are very committed to
living like this forever we love being
debt-free for so many reasons but the
main ones are that it gives us freedom
peace of mind and options basically
since we aren't taking all of our income
all of our pay and giving it to banks
and credit card companies and student
loan companies and car dealerships and
everywhere it leaves us with a lot more
money in our pockets in our bank
accounts that we can then decide what we
want to do with it so it keeps us
focused on the future always thinking
ahead instead of thinking about things
that we already spend money on in the
past you know debt keeps you in the past
so if you're already dead free and
you're looking to stay that way or
you're learning how you can avoid debt
in the first place and continue your
debt-free lifestyle then this video is
for you let's get into my tips my first
tip for debt-free living is to get
yourself financially literate it is so
important that you've just read every
single book you can find about personal
finance you know when I was in this
stage I was obsessed I was reading
everything I was listening to every
single podcast and this really taught me
different ways that debt works against
you and that that's not really a good
plan to use debt to fund your life and
that you can actually make money work
for your work in your favor but you need
to understand how money works and you
need to have a basic understanding of
you know certain financial tools that
are available to you and how you can use
them to your advantage so invest in
yourself and spend time getting
financially literate and always always
learn more there's always things to
learn my second tip for debt-free living
is to live below your means so basically
if you are making say three thousand
dollars a month
you're spending $5,000 a month you are
living well beyond your means and that
means that you are making up that
difference with about two grand in debt
and you know this sounds extreme but a
lot of people they live this way they
just don't really realize it because
they're swiping their credit card and at
first it doesn't feel so bad maybe you
have some payments that you're paying
and you don't really notice how fast it
is building up so it is really important
to live below your means so if this is
your situation you basically have two
choices and one is to cut your expenses
and the second one is to increase your
income or I would definitely recommend
that you do both at the same time that's
gonna help you get that buffer in your
life faster that buffer between what you
earn and what you need to live you need
that to have extra money there that you
can do as you wish with to invest in
your future so we got really extreme
when it came to cutting our expenses and
increasing our income and we were able
to find ourselves that margin in our
lives even when we were working
minimum-wage jobs I was waitressing and
my husband was also bartending he was a
student he was doing construction we did
everything we could I mean anything that
could give us an extra 20 dollars we
would take it so if you have the right
attitude I think that you can do it I
know it's not easy I know it takes a lot
of sacrifice but there are ways to live
below your means even if you're on a low
income although I completely understand
it is not easy so my third tip for
debt-free living is to get smart with
your spending and definitely try out
borrowing or trading it's always good to
think twice or three times before
spending money or before buying things
let's be honest we live in a crazy
consumeristic world and this mindset is
really getting a lot of our generation
into financial trouble and it's also
destroying our planet at the same time
so instead of buying every little thing
that comes up that you need it's always
good to try out borrowing things first
from friends family your local library
you know if you need a power tool to
hang a picture you don't necessarily
need to head down to a store and buy
something that you're gonna use once and
then it collects dust or you can try out
trading trading is
super easy way to save money and live a
more sustainable lifestyle and today's
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others to start trading and living more
sustainably I personally think it's a
really fun and innovative way to get rid
of your donation pile I just made an
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and out of my cellar and it makes me
really really happy knowing that things
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love that things are given a new life
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they're linked down below so on to point
number four and that is when you spend
because let's be real you're gonna have
to buy things sometimes you're gonna
have to spend money but when you're
gonna spend make it intentional this is
super important when it comes to staying
out of debt and especially credit card
debt buying things to keep up
appearances or to impress other people
it's not only a waste of money it's also
a massive waste of resources because
every single thing that we buy uses
resources uses energy uses labor and
when you buy something and then you do
not use it and it just gathers dust or
you know you do whatever with it you
don't use it it's just it's a waste and
it's unsustainable and when I do want to
buy something that I think is going to
generally make me happy or genuinely
fill-a-need
my life I am learning to focus on
quality this is a new thing for me
because I am a frugal girl but when I
buy things now I'm trying to think more
about spending more upfront to get
something that is a quality item that's
going to last longer I just think that
that is something that you need to kind
of retrain yourself on if you've been
super frugal for her years and years
like I have but I'm trying to learn to
spend like a little bit more on a
certain item to get something that's
gonna last longer and it's gonna cost me
less per use you can also look at cost
per use right you might get a pair of
expensive shoes but they're gonna last
you a long time your cost per use could
actually be lower than a pair of cheap
shoes that will last you for a month so
yeah it's okay to spend but when you do
make it intentional number five it seems
super obvious but that is just to simply
eliminate debt as an option eliminate
that as a way to pay for things to fun
things to do things just eliminate that
as an option physically and mentally so
physically don't carry credit cards you
know I do not use credit cards I have
not had a credit card in a very long
time and I know people have their
opinions on that about credits and all
of that well luckily I live in
Switzerland where there is no credit
rating like in the u.s. at all but
anywho I do not carry credit cards do
not recommend that and when it comes to
bigger massive purchases like education
cars starting a business eliminating
debt as an option is going to force you
to get really really creative I can
speak from a lot of personal experience
on this I managed to get my bachelor's
degree and master's degree debt-free
very creatively a lot of creativity
going into all of that
I'm also you know in the middle of
funding a start-up that costs a lot a
lot of money and I just eliminated debt
as an option from the beginning and it
has made things of course take a little
longer be a little bit more difficult
but in the end I know that this is the
way that we want to start this company
and we're finding other ways to you know
fund our things that we need to pay for
of course it would be pretty easy to
just charge it too
business credit card or you know get
some sort of loan to fund things but we
have completely eliminated that as an
option and it forces us just to work
hard you could creative find ways to cut
expenses and I know if you mentally
eliminate debt as an option you're gonna
be creative to my sixth tip for a
debt-free lifestyle is to always have an
emergency fund and actually a spender
fun too so for a lot of people they're
kind of financial back-up plan is I have
my checking account I have some money in
there and if there is an emergency I
will put it on a credit card I know a
lot of people rely on credit cards as an
emergency fund as a back-up plan and I
really think a credit card is not a good
back-up plan you need a little bit of
money sitting aside okay you need that
emergency fund because emergencies come
up and if every time an emergency comes
up you're charging it it's gonna loop
it's gonna add up really quickly so I
have an emergency fund of about six
months living expenses which is you know
something I would recommend if you can
even just get a couple thousand put
aside depends on you know your lifestyle
your income if you have kids different
kind of factors I can do a whole video
on that but for us we have decided for a
six month emergency fund and then we
have also a spender fund that we keep
one thousand dollars in so for us it's
checking account spender fun emergency
fund so that's how we stay out of debt
that's important to staying out of debt
so for us the spender fund we keep it
separate from the emergency fund because
things like for example getting invited
to a wedding right say we would get
invited to a wedding like you know 30 60
days in advance and we haven't had time
to like cash flow a little spender fund
for that event then we will take that
out of the spender fund so will book our
plane tickets in our hotel out of there
this actually just happened to us
recently I'm going up to London for
something and I only
about 30 days notice so we decided to
book the hotel and plane tickets out of
that spender fund and then basically as
soon as we come back from the trip we
will fill that up before we will book
anything else or do anything like that
spender phone we also sometimes use for
hey I need a new suitcase this is
obviously not an emergency doesn't need
to come out of the emergency fund but
that's just kind of like allows us to
spend a little bit if we need to my
seventh tip for debt-free living is to
be financially organized make financial
organization a habit in our household
this basically means one thing and that
is regular budget meetings my husband
and I actually physically sit down at a
table with our budget binder and we just
say hey where are we where do we stand
we just got this money in from something
where is this gonna go and we do this
regularly we're always talking about
where we stand financially we're always
making plans we're always just fully
aware of our situation and this is very
important you need to always be aware
where you are and you just need to be
organized if you are not alone in your
household it's really good to get
everybody involved you know like you're
your spouse or your boyfriend your
girlfriend whatever you need to be on
the same page all right last tip my
eighth tip for debt-free living is to
have goals focus on the big picture and
know the future will come trust me it is
so easy to stay out of debt if you have
a plan for your future and if you have
really solid goals in your life so for
me this means having a really strong
vision and mission for my life overall
which I know sounds like a big thing but
I like to discuss that every now and
then and write it down and think about
it and then I regularly have reality
checks where I go Sarah where you're
spending your money while also your time
but this is a financial video so we'll
talk about that so where you're spending
your money right now where you spent it
the past month is that leading you
closer to your ultimate goal in life to
your vision and mission for yourself
it's important to have these reality
checks so I'm always asking is my
spending habit getting me closer to
where I want to be in the future and if
it's not if you ask yourself
that and it's not then you probably need
to reevaluate some things in your life
because if you're telling yourself
what's important to me is being
debt-free owning a house being able to
travel being able to have kids one day
and pay for that or whatever your goals
alright though if those are your goals
but every day you're going out and
spending all your money on clothes and
food and things that are not getting you
at all closer to your goals I think it's
time to have a reality check and
understand that where you're spending
your money tends to show where you're
focusing where your where your values
lie and a lot of times this just needs
to be reevaluated and I do this on
myself all the time I have these reality
checks I hope this video wasn't too
heavy you guys I know I can ramble a lot
about this topic but those were my tips
and I know to a lot of people watching
this video they probably think this
sounds like a lot of work a lot of
compromise and you know what sometimes
it is but I can assure you that it is
worth it that's it for today's video you
guys if you're not subscribed make sure
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personal finance videos for me from me
and I'll talk to you very soon
bye thanks again for watching and don't
forget to download buns in the
description box down below it's an easy
way to save money and live more
sustainably so try out Trading the buns
today
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