Debt Free Is the Way To Be

Your prelude to financial freedom

to becoming debt free. Just ask the Weavers. They make note of what they spend and find ways of cutting costs wherever possible. Although they now live in a $275,000 home in the exclusive Southland subdivision and their neighbors are doctors, lawyers, and executives who drive shiny Mercedeses, Lexuses, and Jaguars, the Weavers live on a strict budget. Because they do, they can put all of their extra money into savings and investments. “We have always lived below our means and do not try to compete with others,” states Triscilla. “We don’t have the nicest car or biggest house because we focus on what is comfortable and meets the needs of our family.”

Amazingly, the Weavers have been able to remain practically debt free even though Triscilla has been attending school over the past 13 years. Most people use student loans as an excuse for being in debt. But the Weavers consider the investment as another bill that requires planning. Since their marriage, Triscilla has worked full-time while pursuing her bachelor of science and master’s degrees in middle-childhood education. She is now working on her doctorate, which she will complete in 2001.

“We’ve spent $45,000 of our own money already. I have never gotten a student loan. We set the criteria that I would only take classes that we would be able to pay for,” says Triscilla. “We would save the money for three months prior to the semester. My education has been a part of our monthly budget for the past 13 years.”

Plan for the future. Before you can achieve financial success, you must have clearly defined goals. When individuals are in debt, they have no financial security, no savings, and usually do not invest in 401(k) plans. “Being in debt prevents a [financially secure] future. You are transferring your wealth to the creditor,” says Hunt.

“Being debt free relieves stress, and that
plays a major role in your lifestyle,” says Tony. “Since we are debt free, it allows us to save a great deal and to invest in our 6-year-old son T.J.’s future and our retirement.”

To show individuals how to stay out of debt, Ric Edelman, a financial planner and the chairman of Edelman Financial Services, teaches a seminar called “Square One” that shows consumers how to get out of debt. “The first thing we do is teach consumers to examine their spending habits. Too often people have no idea where their money goes,” says Edelman, who is the author of The Truth About Money (Harper Resources, $19.95). “We then show them how to reduce unnecessary spending and how to anticipate future spending. This allows us to focus on income and existing savings, and allows us to set up a plan to eliminate the existing debt.”

Don’t expect instant miracles. You did not get into debt overnight and will not get out overnight. In a telephone survey it conducted in 1999, Myvesta.org found that consumers have an average of three cards with $1,751 in total credit card debt. If they make the

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