Don’t look now but, but someone told me I am Debt-Free.
No, not me! Heavens no! Because I have a few helpers. The kind that help you spend your money. Some folks call them ‘children.’
This is a story of a colleague of mine whose goal was to be debt free by age 55. He reached his goal this year. Naturally I had to press him on how he was able to accomplish this goal.
Clear Goal Setting
He told me he set that goal many years ago. He could not recall his exact age, but he believes he was 29. What he liked about this goal was its simplicity.
Be Debt Free by age 55.
He said this made it much easier to focus on. He would look at this goal along with his other annual goals on his birthday in October. By checking in with this goal he was able to keep it visible. This allowed him to keep this goal in mind when he was spending, saving or borrowing money.
I asked him how he managed to achieve this goal, he said it wasn’t easy, yet, surprisingly, it wasn’t as difficult as you might think.
Housing and Cars
He and his wife bought their first starter house. After they had two children, they decided to buy a bigger home. Keeping his long term goal of being debt free at age 55 they did buy a bigger house. But they didn’t buy the biggest house they could afford; they bought something a little smaller. And they only took out a 15 year mortgage because of it. He saved money for home improvements and projects so he could pay for them without refinancing the house.
He went on to explain another key choice, they also always bought used cars. Sure, they weren’t the latest model and had some scratches and dings on them but they worked. His reasoning was simple, he didn’t want to buy a brand new car and have it be worth a lot less when he drove it off the lot. This would not help him achieve his goal. He clearly had said Goodbye to the Joneses. 3 Practical Ways to Arrive Financially.
He also said while he watched his money, he and his family never felt they missed out on anything.
Curious, I asked him why this goal mattered so much to him.
He said it was all about financial freedom.
He’s still working and expects to continue to do so into his middle 60’s. He’s not financially independent. Yet. But now he can spend and save some of his income. He has no debt and this has created his family’s financial freedom.
The Takeaways
After my conversation with him my takeaways were:
* First and foremost, have clear, written goals and check in with them at least annually.
* Make conscious choices about how you spend, save and borrow money.
* Don’t deny yourself. Life is too short.
Conclusion
If you need help with Don’t Look Now, But Someone Just Told Me “I’m Debt Free” give Thomas F. Scanlon, CFP, CPA a call at (860) 645-1515.
This article is original content written by Manchester, CT Financial Advisor Thomas Scanlon, CFP®, CPA.
This article was originally published on May 30, 2020 and has been updated.
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