The audible Four Principles of a Debt Free Life
In January 2016, we did a 4-month long ‘Four Principles of a Debt Free Life’ series! We covered each of the four principles we wrote about in our book, 4: The Four Principles of a Debt Free Life. This article’s a recap of the whole series about our book all in one place for your convenience.
The 4 principles of debt free life recap
4 is about what we learned personally and professionally about getting out of and staying out of debt after we paid off $51,000 in credit card debt. Each week of the series to save you from having to read, we discussed the highlights of that week’s principle and gave you free tools to help you master each of the four principles.
That’s faster for you, but if you prefer to read, 4: The Four Principles of a Debt Free Life, you can get it by clicking here.
1. Debt free principle 1: Be money conscious
This principle is uniquely interesting because when we wrote 4, we thought we coined this term. It initially meant to us being clear on how much money we earn, save and spend. When we needed more money, we learned how to make more money. It meant understanding the economy and how local, national and global economies affect us.
It wasn’t until after we published 4 and read Napoleon Hill’s, Think & Grow Rich, that we learned we weren’t special. In his book, Hill talks about money consciousness on a metaphysical level. The results on both a practical and metaphysical level have the same results, as Hill says, “only those who become money conscious ever accumulate great riches.”
Hear how to become money conscious on this Queer Money®:
2. Debt free principle 2: Live below your means
Live below your means sounds outdated, but it’s critical to getting and staying out of debt and achieving financial success. On this Queer Money®, we talked about how this principle affects everyone – wealthy and poor, black and white, gay and straight and everyone in between.
Live below your means is such a powerful principle that it takes down many seemingly successful people. We shared examples of celebrities who famously lost all their riches because they didn’t live below their means.
We shared keys we learned about how to live below our means while we paid off our $51,000 in credit card debt. We discussed several tricks to help you start to live below your means and to increase your means.
It wasn’t until we respected this principle that we turned our financial lives around. That’s an ugly story that you can read all about by clicking here.
Get more tips to live below your means on this Queer Money®:
3. Debt free principle 3: Cash is king
The week we covered the ‘cash is king’ principle, we talked about the benefit of switching to a cash-only lifestyle and how doing so gives you a 20 percent raise. The cash is king principle provides practical advantages. Studies show that people who use only cash typically spend less cash and pay less in interest fees.
When we had $51,000 in credit card debt, we were paying $10,000 annually in interest payments. That’s the cost of a few nice vacations or a contribution to a down payment on a home. When we paid off our $51,000 in credit card debt, we gave ourselves a $10,000 raise. This raise dramatically improved our quality of life. Then, we turned our attention to increase our cash flow because having more cash makes it easier to manage cash.
One of the ways we managed our “all-cash lifestyle” was to use the traditional envelope system, as we discuss in more detail in 4: The Four Principles of a Debt Free Life.
Hear why cash is king and what to do about it on this Queer Money®:
4. Debt free principle 4: Have a financial plan
Just like you can’t drive from New York City to Los Angeles without directions, you can’t achieve financial goals without a financial plan. This includes knowing the starting point of where you are financially and the ending goal of where you want to be financially.
On this Queer Money®, we talked about how we created and why we have a financial plan. We discussed the benefits and risks of not having one. Along with this week’s free tool, we covered other instruments, such as investment accounts and ways to increase your income to create and improve your financial plan.
We share how it wasn’t until we knew which direction we wanted to go with our financial lives that we could go from a negative net worth of $10,000 to a positive net worth approaching $700,000. So, you need to have a financial plan.
To help you master this principle, get your copy of 4: The Four Principles of a Debt Free Life by clicking this link here.
Learn how to create your financial plan on this Queer Money®:
That’s the entirety of this Four Principles of a Debt Free Life series. We had a good time and hope you did, too.
To dive deeper into all of these principles so that you, too, can live a debt free life, click here to get your copy of 4: The Four Principles of a Debt Free Life.
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