How to Mentally Prepare for the Downfalls of the Debt-Free Lifestyle

The debt-free lifestyle has become that barely attainable dream that many Americans have begun firmly attaching their sights to with reckless abandon. The common misconception is that a life without debt is a glamorous one. Unfortunately, the truth is that so many Americans don't currently live debt-free lives because they cannot handle the steps it takes to make the necessary adjustments. Living debt-free is a sacrifice, not an instant ticket to financial freedom. While one might not necessarily call them "downfalls," there are certainly trade-offs to be prepared for before embarking on the debt-free journey. Increase your odds of staying on track with the following tips on how to mentally prepare for the downfalls of the debt-free lifestyle.

Trade-off #1: Owning an older home vs. financing a newer home. If your goal is to pay off a home with the average American income of less than $50,000, realistically speaking you should not expect to do so if your home is brand new and costly. The debt-free usually live in older, smaller homes in slightly less convenient locations until they have saved enough to upgrade without the need for financing. In other words, you can expect years in that older home, which means giving up on keeping up with the Joneses altogether.

The upside: Owning an older home can be even more fulfilling than purchasing a new one if a little creativity is involved. A home with a deep, rich history isn't something that can be manufactured. A little paint and a few upgrades and your older home in your new debt-free lifestyle can be just as satisfying, if not more so, than its more expensive counterparts. While it does take time to bring an older home up to par, you can use the money saved on the mortgage for home improvement projects much faster than you could have before.

Trade-off #2: Owning an older car forever vs. owning a new car every year. If you're accustomed to trading your car in each year and you are bring in an average income, you'll have to mentally prepare yourself for the downfall of owning an older car for the sake of being debt-free. That will probably mean always owning an older car, although you can make upgrading the model and make a priority over time if you wish.

The upside: Once driven off the lot, a brand new car usually drops in value a bit. Consumers in our fast paced economy often forget that a car depreciates in value unless it is a rare classic in the making (which isn't likely). As such, even the more affluent are driving cars that are at least one year old today.

Trade-off #3: Cheaper meals at home vs. expensive meals in restaurants. Let's take this a bit further, for the sake of being as grounded as possible. If you want to become debt-free and you have even close to the average amount of family debt in America, you'll likely have to downgrade your kitchen staples as well. Generic brands and a little more pasta than you're used to might be in store.

The upside: A well stocked pantry, even if it is full of less expensive foods, is a comforting site for a family. If you have any doubts, ask a family that has been without. There are more of them out there than you might be comfortable realizing, and everyone is becoming more and more susceptible to the danger regardless of their current living situation. Now keep in mind that downgrading the sophistication of your diet doesn't necessarily mean downgrading on its nutritional value. It simple means buying in bulk and consuming meals that are a little more wallet friendly. Fresh fruits and vegetables, as well as herbs and spices, add a great deal of flavor to less expensive meals with little effort.

Trade-off #4: A greater time investment vs. ultimate convenience. Think about your crazy lifestyle for a moment. From restaurant dinners, to shopping malls with every product imaginable, to hired help for everything from housekeeping to hair touch-ups, we are constantly being catered to. Now think about clipping coupons, searching for hours for a better bargain, and doing your own household, garden, and personal care work. In order to devote yourself to working toward a debt-free lifestyle, sacrifices must be made that aren't going to be convenient or schedule-friendly.

The upside: Once you get a routine down, you'll know the best stores, quickest homemade meals, and most practical home and personal care strategies by heart. The initial tasks can be daunting, but the overwhelming effect will pass with a little perseverance.

Trade-off #5: No lagging credit card bills vs. no credit card safety net. While the thought of permanently warding off bill collectors is soothing, not having that card handy when a tire goes flat or a paycheck comes late can be devastating. Prepare yourself ahead of time by saving up emergency cash before cutting up the cards.

The upside: While saving the amount of cash that your credit card offers instantly can take a while, you'll gain the same effect without the added interest over time. Replace any used funds from your emergency account based on your own timeline, your current income, and your own devised payment plan. You'll have the freedom to make adjustments as needed without the need to work out a solution with a creditor and without interest payments piling up each month. In other words, an emergency savings plan offers the same safety net as a credit card, but without the hassle. You'll simply be responsible for restocking it carefully if it must be dipped into for any reason.

If you can mentally prepare yourself for the "downfalls" and trade-offs associated with switching to a debt-free lifestyle, you're already on your way to sounder sleep at night. Just keep in mind that living without debt means living without fear for tomorrow, and even if that means driving an older car or living in an older home, the result is priceless.