Why Paying Off Debt is Not the End Goal

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For many of us, being debt free is the end goal, the final step towards our journey of financial freedom. But we don’t give much thought to what life after debt will look like.

When we imagine what our life will be like after paying off all your debts, it goes something like this; you’re hanging out on a beach somewhere, celebrating debt freedom, and able to buy anything you want.

While this may come true some day, you’ll quickly learn (as I did) that reality is not quite as realistic as your dreams.

Paying Off Debt is Just the First Step

Setting a goal of being debt free, and working towards that goal, is just the first step in the journey. It takes a lot of discipline and motivation to not give up and reach this goal. You essentially have to change your lifestyle, cut back expenses, adjust your budget, and find more creative ways to buy things without spending money.

Much like changing your eating habits, paying off debt is a not a short-term commitment. You don’t aim to lose weight or get out of debt and see the results the next day. (Don’t we all wish?!) The point is to change your habits so you can create a new mindset and lifestyle that enables you to live without debt.

Why? Because getting out of debt is just the first step. You have to change how you spend money, create new savings habits, and alter your mindset about managing money or you’ll end up right back where you started — in debt and struggling to pay bills.

Staying Out of Debt is the End Goal

I speak from experience when I talk about this. I spent 14 months paying off over $14,000 of consumer debt, only to find myself back in debt when I started my business last year. I did a good job of being disciplined for that year I became debt free, but I never thought about how life after debt would be. So I ended up at square one again.

Life after debt is likely much different than anything you’ve experienced before. You have to consciously make proactive decisions for items you want to buy, as well as taking care of your future financial needs.

For example; if you want to purchase a new car without taking out an auto loan, you have to save for a year or two in order to afford it. You can’t just see a new car you want and apply for a loan to purchase it. This also means you have to get used to delayed gratification and saying NO to impulse purchases. While in theory this may seem easy, in reality it’s not quite that simple.

The first thing to understand is that there’s a big difference between paying off debt and staying out of debt for the rest of your life. This takes a bit more thought, intention, and strategy. During the process of becoming debt free you’ll have to change a lot of bad money habits and learn to form new ones.

In other words, learning to pay off debt is easy and a goal we all need to work towards. But even more important is creating a long-term solution, habits, and a mindset for staying out of debt for good.