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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

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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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video a thumbs up if you want more

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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