How to Live Debt Free - 12 Steps to Total Financial Freedom

- John Wesley
English religious leader (1703 - 1791)

Your current financial situation is not necessarily your fault. I'm sure that you are like most people and never were taught by family or the educational system about how credit works. Few ever learn the power of compound interest or what credit really is.

Think about it for a moment. Where did you get your financial training? Where has the result of that training gotten you?

You are about to learn throughout the entire course of this series how to manage financial resources such as:

- Credit Management

- What To Do With Your Paycheck

- How To Plan Your Financial Life

- How To Plan For Retirement

In Step 1, we discussed internal change. A definition of insanity is doing the same thing over and over and expecting a different result. You need to change the way we feel and act about our finances. So let's look at what credit is. If I was to ask ten people, I'm sure I would get pretty much the same answer. It would be something like credit is the opportunity to buy now and to pay later. That may hold some truth but look at it this way:

Credit is the opportunity to pay more for a product or service than is being asked.

Looking at it this way produces a different inner feeling, doesn't it? Does it make you feel a bit foolish? Does it make you mad that you have become a prisoner of debt?

So ask yourself, what are you willing to do to change? Be specific. The more clear you can be with this answer, the better off you will be.

The next thing you need to do in this step is to develop a plan. Set some goals. Develop a plan of action and work it. You start this process by determining what you want, the end result that you desire and work backwards. Dare to dream. Remember when you were a child and thought the world was wide open and you could accomplish anything. Get back to that type of dreaming. The sky is the limit.

When you're finished with your dream list, take a moment to examine what you wrote. Did you impose any limits based on other people's beliefs or cultural beliefs? If you did, start the process over again. You will feel it when it is right for you. Make it personal. You might want to complete this sentence: "If I had all the time in the world, and all the money I needed, I would.....

What is on your list? Does it include a big house and a fancy car? Maybe an expensive vacation or two? That would really be a great life, wouldn't it?

Maybe.....maybe not. In reality, you've probably never lived that way and don't know what it would be like. You have based your decisions because you have been conditioned to think that this is what you want. This is an advertiser's definition of success.

Or maybe it is what you really want. Only you can decide. Only you know what is in your heart. Don't let me put any limitations on your dreams. Really, explore what you truly want out of life.

Maybe, and I don't know if this is your truth but, are you trying to keep up with the Joneses? Many people have followed the Joneses right into the poor house, so make sure, beyond any shadow of a doubt that you have determined what you really want out of your life.