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Debt Is Not the Only Option

How to avoid debt and enjoy more financial freedom.

As the season of spontaneous summer spending comes to a crashing halt, we thought it might be a good refresher (for all of us!) to get back to basics. A little "Budgeting 101" to help us reset and refocus on the "why" and "how" of budgeting, prioritizing, saving, spending—all of it! There may even be a little homework. Class is in session, so grab your budgets and follow along!


Living without debt may seem impossible, especially when you’re in it up to your eyeballs. Trust me, I know. And, it’s easy to point a finger and blame the big stuff, like student loans, a medical emergency, or a period of unemployment. That stuff’s hard.But, before you give up and accept indebtedness as your new normal, there’s something you should know. For most of us, those large, ‘emergency’ expenses aren’t the whole problem—they’re just the tipping point. In so many situations, it’s the accumulation of a lot of smaller purchases that really make us financially vulnerable.If you want to get out from under the weight of debt, instead of fixating on the big ticket stuff, zoom in on the smaller purchases that are contributing to the problem. You can’t rewind time and not have a medical emergency, right? But you can ask yourself this:

What Are Your True Expenses?

If you’re new to budgeting, you’ll likely encounter more “emergencies” than a seasoned budgeter. It’s not that you have bad luck, at least I truly hope not, it’s just that we tend to look at our bills and expenses as a steady, monthly drip.The problem is, there’s no such thing as a normal month. You might spend $3,000 in August and, when September rolls around, discover that back-to-school expenses bump that figure up to $3,500. Maybe you get a company bonus in November, so you live like a king for a month … but then December hits, and your Christmas spending is out of control. Inevitably, after the shopping spree, Murphy’s Law kicks in, and your car needs a pricey repair. Or your cat needs surgery. Or your annual insurance bill comes due.You get the idea.So, how do you get ahead when the waves of income and expenses are so choppy?

Rule Two: Embrace Your True Expenses

To avoid leaning on your credit card (which only makes your problems worse!), embrace Rule Two, Embrace Your True Expenses. When you budget for all of your expenses—not just the regular, monthly ones—you’ll be ready when those less frequent, larger bills and expenses pop up.For example, let’s look at Christmas. Consider for a moment that you never have to be caught off-guard and without holiday shopping money. Simply reverse engineer your cheer. (That means start saving in January!)But, what about actual emergencies, you might be asking? If you own a home, how about budgeting for home repairs? You’ll thank yourself when the dishwasher explodes. Are you a parent? Maybe a back-to-school clothing category makes sense.… or just set up a catchall emergency fund. If you’re a new budgeter, that might be a good idea, anyway. You can refine your budget categories over time. The important thing is that you set aside dollars to cover all of those “emergencies.”

Avoid Debt by Focusing on What You Can Control

Of course, true emergencies will crop up. But, if you’re staying out of debt by living within your means and budgeting for your true expenses, you’ll be in a much better position to manage your circumstances.Imagine what life would be like if you never had to scramble to cover an unexpected expense—if you never needed to lean on credit—because you had total control of your cash. If that sounds good, then maybe go check out our free, 34-day trial.

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Debt Is Not the Only Option