Debt Free Living Ever Think About It?
The majority of Americans do not know what it's like to be debt-free many young adult college students start out by attending college and taking on student loan debt to finance their education. Furthermore, while in college, credit card companies bombard students with credit card offers. Which puts the students into debt further!
When students graduate with a degree they're graduating with a very large amount of student loan, credit card, and even car debt. After graduation and being in the real world, they take on more debt. In the form of a mortgage. Never stop and think about how to become debt-free and rid themselves of the payment lifestyle they have created.
What Would You Do Without Debt Payments?
Have you ever considered the amount of money you pay your creditors on a monthly basis? With what you spend on a monthly basis on your debt payments have you ever thought about what you would do with the extra money on a monthly basis if you are living a debt-free lifestyle? Would you have more money in your savings account? Have a vacation fund put aside? Therefore, you could finally quick that J-O-B that you hate without having to worry about your finances. Can you just imagine how that would feel to be debt-free?
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Debt is the Shortcut to Perceived Happiness!
Ever heard the expression keeping up with the Joneses? Which can mean many things to different people. When you're focused on living a debt-free lifestyle that means you and your family are not going out and buying things on a whim because you just want them.
Many of us mistake debt as our friend. In reality, debt keeps you financially tied to your creditors. Debt keeps you living paycheck to paycheck. Debt is that undue stress you have been dealing with for years! Even though you feel you can just put it in the back of your mind. Why do you want to live to pay someone's vacation home mortgage?
Now It Is Time to get To Work on Your Debt Free Journey
Sounds like you're ready to get to work and live a debt-free lifestyle. The first thing you need to do is put a plan together. The first step in the plan will be the all dreaded budget. When was the last time you actually created a budget?
Creating a budget is pretty easy it's just basic high school math. On one side of the column, you have your income the other side you have your outgoing which is your bills and then the last column is the remainder. With that being said you need to make sure that you list all of your financial obligations. All your creditors any other types of debts that you have and then all your ancillary spending. What I like to call the nice to have's. Like Starbucks, eating out, movies, and shopping.
Creating Your Budget is Key to Living Debt Free
Next list your debts from smallest to largest balance. Your smallest balance will be the first debt you pay off. You will pay the monthly payment plus extra money. Which will start your snowball effect plan. The extra monies you are paying towards your debt have to come from somewhere. That means you will have to stop spending your money on nice to have's. And start making sure your four walls are taken care of first and foremost.
Last but surely not least, you will need to increase your monthly income. Whether that is through a second job, selling items, or working out of your home. Whatever avenue you choose you will need to be dedicated to becoming debt-free.
The debt-free journey is not easy! But all great things are worth waiting for. Do not forget this important point. Being debt-free equals freedom! And all the stress and worries you had in the past are just that - In the past! Here is to your debt-free journey! Stay strong!
Comfort is the Enemy of Success!
What Can a Financial Coach Do For You?
A simple way to clarify what a financial coach is to a financial advisor is as follows:
Financial advisors often tend to focus on implementing monetary items and techniques, while financial coaches focus much more on the fundamentals of individual money management, behavior change, and also creating an environment of accountability for their client's spending habits.
While financial advisors most commonly help to maintain the wealth that the client currently has, a financial coach's task is to provide their client the expertise, abilities, that will assist them to live a debt-free life and start building wealth.
A big difference between a financial coach and an advisor is that coaches do not sell or try to push financial investments to their clients. We educate our clients on the different options of insurance coverage, budgeting, and ensuring our clients has the proper diversification when it comes to liquid versus illiquid capital.
But we never provide financial guidance nor do we suggest specific investment opportunities. When clients come to me they are usually in some type of financial crisis and do not have any additional monies to invest. They are looking for relief with their debt and investing is the last thing on their minds.
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Financial coaches have a unique role and can play a complementary role with a financial advisor once the client is in a solid financial position, which means they are debt-free! Both individuals play key roles in their client's financial journey, but each does very unique things and works with their clients in very different financial situations.
Financial coaching allows me to mentor and guides my clients through their financial journey. As a financial coach, I get to dive more into my client's "Why" to understand their relationship with money. And finding out answers to the below questions is life-changing:
Let's discuss what I do as a financial coach. First and foremost I am a coach. I engage with my clients by supporting/guiding them to achieve their financial goals, and that all elusive "Why" they have been searching for. I like to tell my clients I am their Yoda and they are Luke Skywalker. And the road to financial freedom is paved with setbacks and hard work.
I offer encouragement throughout their entire journey, which helps them stay on track, and also holds them accountable to their financial goals. In the end, I am their biggest cheerleader and their success continues to fuel me to find more clients that are in need of finding their financial "why".