Change your money-spending mindset to reach a debt-free future

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Living debt-free may sound like a dream, but it's not an impossible goal provided you have the right discipline, mindset, and know-how when it comes to spending.

So what does it take to avoid the debt that most Americans carry? The following 9 tips are a good place to start for anyone who’s interested in laying the groundwork for getting out of debt and creating a brighter financial future for themselves. 

1. Commit to yourself

The truth is, tackling debt isn’t easy. There may be moments where it’s tempting to throw in the towel, abandon your strict saving goals, and take a pricey vacation or give into a big purchase.

The trick is to envision a debt-free future where you have greater flexibility to make the choices you want without living under the cloud of debt. 

First and foremost, you have to commit to reducing your debt, even if it comes with some tough spending cutbacks—this isn’t something you can do halfway. 

2. Set goals and review them often

Once you’ve decided it’s time to give debt the boot, the next step is to make a financial plan that includes your goals. Think of this plan as your North Star, always there to guide you along in your debt-elimination journey. Vary your goal sizes, too—while living debt-free is the destination, what smaller milestones can you hit along the way?

3. Don’t be afraid to question norms

What’s the point of getting a new car? Is there really a benefit to buying a house versus renting? The more you poke holes in the spending norms that permeate American culture, the more you’ll realize you don’t have to go the traditional route just because “everyone else does.” 

4. Treat your money as a tool

Many people think of money as a finite resource. Powerful savers, however, treat their money as a tool. Resources can be depleted, but if you think of money as a tool you can wield, you’re more in control of what you can build with it. 

Want the potential to reach your savings goals faster? A high yield Varo Savings Account offers no fees and easy auto-saving tools to help grow your money.

5. Stick to the essentials 

In many ways, striving to be debt-free is similar to practicing minimalism. Buy only what you need, and be very critical about the definition of “need.” Eventually, you’ll stop craving the short-term thrill of spending money.

Look around the room you’re in now—what do you see that you haven’t used all week, all month, or even all year? Buying these things probably made you happy at first, but they may have quickly fallen into disuse.

Practice owning less while valuing and utilizing what you already have.

6. Experiences matter more than what you can buy

This is a tricky one for savvy savers, as some experiences like trips and concerts can be costly. Seek out fulfilling moments that don’t have a price tag—hang out with friends at home, volunteer, spend time in nature, or take advantage of free museums and local events. You may discover that those memories are just as valuable.

7. Say “no” to things that don’t align with your goals

“No” may become a word you use often as you try to eliminate debt. There’s nothing wrong with opting out of expensive dinners, fancy vacations, or holiday sales if they’re going to set you back. It takes practice to say no, but it’s a muscle that strengthens with time as you start to see your debt decrease.

8. Enforce a waiting period for certain purchases

Put your buying impulses in check by waiting at least 24 to 48 hours before making a big purchase you’re unsure about. Many stores will even let you put an item on hold overnight. You may find that by the time this waiting period is over, you don’t want or need the item after all. 

9. Focus on the big picture, not the present

Most of these tips require a lot of self-discipline. But, it’s easier to follow your plan when you can remind yourself of what you’re working towards. Focus on what future financial freedom looks like and let that guide your actions. 

Debt-free living can be your reality if you’re ready to take the first steps. No matter how much you have to cut back, the peace of mind you’ll gain from eliminating your debt in the end is priceless. 

Unless otherwise noted above, opinions, advice, services, or other information or content expressed or contributed by customers or non-Varo contributors do not necessarily state or reflect those of Varo Bank, N.A. Member FDIC (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s) other than Varo.