"All of us have it and we always will, so what's the use in trying to pay it off?"
Have you ever heard those statements, or ones just like them? Chances are you've also either said something like this yourself or at least wondered if these statements are true. So then, what is the big deal with being debt free? Isn't debt a necessary part of building wealth over time and acquiring needed things to build for the future?
It wasn't until a stark realization hit me a few years ago that I began to see the light for why debt is so damaging, and truthfully, so unnecessary. Consider this truth: debt is a tool that exists to steal from your future for some lesser benefit today. Isn't that exactly how debt works? When we decide that there's something we "need" today and buy it with debt, we therefore trade away our future earnings, along with interest costs on top, so that we can satisfy our need today - and therefore do without what could be more and better down the road.
The assumption is that everyone has debt and that it's a necessary tool to make it in today's world. The reality is that most of us are far too willing in our lives to compromise for less today than to wait, be disciplined and have a much better tomorrow. Are you guilty of this thinking? If you are, welcome to being a little too average in today's society. And while it might seem nice to be average, or normal, neither is near as much fun as the rewards you could know in deciding to be highly unusual - and by unusual we mean debt free!
Let's study the financially successful people in our world. They've made it and we'd do well to learn from their successes. So how how have they done it?
Well, the vast majority of the most financially successful people in our world today got to where they are by utilizing their talents and gifts, working hard and entirely avoiding debt. The first two are something we all have. We are all gifted with many talents and we're all able to work hard. But what about the third item - avoiding debt? Here's some "financially successful people" common sense wisdom: wealthy people didn't acquire their wealth by taking on debt. They became wealthy by avoiding debt and all its costs and limitations. They didn't spend their way to success; they saved their way to financial success.
Debt costs real money, and if we really were to take time to sit down and calculate our debt's many costs, we might be surprised by what we'd find. Saved money earns interest while borrowed money costs us money. When we borrow instead of save, we actually trade away both money we could have earned in interest by saving and the value our money could have held if we weren't paying interest charges on what was borrowed. When we borrow money, we actually lose twice - and in negotiation we call that a lose-lose situation. Not good!
Often, those who start the Financial Checklist Plan find themselves having had experienced a little too much of the "live for today" lifestyle. They sometimes had confused wants for needs. The sometimes didn't consider the future tradeoffs of debt. Sometimes they let impulse lead over sound thinking. Now they know the debts of their ways and when debt's cold reality begins to hit home, they know it's time to make a change. Perhaps this is YOU as you read this today. Are you ready to make the change and take on the Financial Checklist Plan?
Hopefully this short post today has inspired you to consider a new path in your life and how much your debt is really costing you - in money, your future and stress. Becoming debt free will make you highly unusual, but being usual is really just no fun. Only 6 steps stand between you and owning your future and building personal wealth. Start with step one and make today the day you journey through the Financial Checklist Plan!