10 Fundamental Truths of Destroying Debt and Building Wealth
This article may contain references to some of our advertising partners. Should you click on these links, we may be compensated. For more about our advertising policies, read our full disclosure statement here.
What’s up frugal fanatics?!?
We’ve turned the page on a new year, which means it’s a great time to get your financial house in order! I know you want to make 2017 the best year yet, so here’s a little secret about a great book that can help you get started.
Our new book, Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love, is available in stores TODAY!
Even better, you can order your copy directly from Amazon right here!
It’s been a long process, and we’ve worked super hard on this thing. To finally get it released feels great. Hopefully, it helps a lot of people. Maybe it can help you too.
Ten Fundamental Truths of Destroying Debt and Building Wealth
With that announcement out of the way, let’s talk about destroying debt and building wealth. Throughout the book, we explore the exact steps needed to get your money straight and pay off debt. But that’s not all.
Zero Down Your Debt is based on 10 key money principles that can change your life. If you understand and follow them, you’re golden. If you don’t, you’ll struggle. Here they are:
Truth #1: Debt is the single biggest obstacle standing between you and the life of your dreams.
When you’re in debt, it’s hard to save for a vacation, your children’s college education, or other financial goals you might have. By and large, debt stands in the way of the things you really want in life, sucking your paycheck into its depths one dollar at a time.
Truth #2: Your paycheck is your most powerful wealth building tool.
We spend our whole lives hoping to hit the lottery or wishing we could just get a bigger raise at work. But if you learn to harness the power of the money you already earn, you might be surprised by how far you can stretch it. Plenty of people have grown rich with modest incomes and careful planning; you can be one of them.
Truth #3: Debt is the enemy of income.
Remember how debt sucks away your income one dollar at a time? When you have oodles of debt to pay back every month, your income never seems like enough. But when you’re debt-free, your income belongs to you, not your debt.
Truth #4: He who has the gold makes the rules.
Borrowing money gives away your power to others. When you owe money to someone, you’re beholden to them and must keep working in service of that debt – not your own goals.
Truth #5: When you tell your money what to do, it listens. When you don’t, it disappears.
When you don’t track your spending or live within a budget, any extra money you earn has a way of disappearing – and quickly. But when you tell your money what to do each month, it works magic for your finances.
Truth #6: A zero-sum budget is the most effective tool for harnessing the power of your paycheck.
Because a zero-sum budget empowers every dollar you earn to pay down debt, start saving, and get ahead with your finances, we believe it’s the most effective tool for getting your money straight. And if you aren’t zeroing down your debt, you’re not doing the best you can.
Truth #7: Debt neither discriminates nor is cured by income. Rather, it is caused and controlled by spending.
Plenty of high earners are deeply in debt, while many with modest incomes live rich, debt-free lives. That’s because debt does not discriminate based on how much you earn. Anyone at any level can dig their way into debt, and anyone willing to rein in their spending can dig their way out.
Truth #8: Living below your means is the most efficient way to unleash your paycheck’s potential.
Living below your means is the best and only way to destroy debt and start saving for the future. Spending every dollar you make means you’re standing still at best, unable to make progress toward your goals. Spending more than you make is a recipe for financial disaster.
Truth #9: If you can’t pay cash, you can’t afford it.
We’re brought up to believe that we can, and should, borrow money to buy anything we want. From new furniture to a new wardrobe, using debt to “buy now and pay later” is commonplace. But, our penchant for debt has proved disastrous for our finances. To avoid a life of debt and ongoing bills, it’s essential to buy only what you can pay for with cash.
Truth #10: Your spending decisions have consequences and are a reflection of what you value.
It’s easy to think that none of your decisions matter too much. Your monthly cable bill, the daily stop at your favorite coffee shop, and the new car you bring home every few years are no big deal, right? Wrong. Here’s the truth: Nearly everything you do with your money matters. Big and small, the decisions you make – and the decisions you don’t make – will eventually make or break your finances. It’s just a matter of time.
Maybe you’re struggling with money, or maybe you’re just not making the most of what you have. Don’t get down on yourself. You can do this! With the right tools and a commitment to change, you can seize control of your finances in no time.
Seriously, you got this. And, there’s no better time to start than right now. Good luck and let’s make 2017 wonderful!
Disclaimer: Comments, responses, and other user-generated content is not provided or commissioned by this site or our advertisers. Responses have not been reviewed, approved or otherwise endorsed by this website or our advertisers. It is not the responsibility of our advertisers or this website to ensure that all comments and/or questions are answered. Club Thrifty has partnered with CardRatings for our coverage of credit card products. Club Thrifty and CardRatings may receive a commission from card issuers.
So straightforward and true! I love #8–it really expresses the connection between earning power and saving power. You can’t save what you don’t earn, but you can’t save what you keep spending.
Thanks Kalie! You’re right – no matter your income level, if you spend it all, you’ll continue to struggle. If you want to get rich, you have to increase your income… but that only gives you the opportunity to become wealthy!
Ayuuup. These are all true. Even though we were making a healthy income over a year ago we were still living paycheck to paycheck. Increasing our income wasn’t the answer; we needed to drastically reduce our expenses to be able to save. And that’s what we did—we currently have a 50% savings rate and we couldn’t be more thrilled. Eliminating debt has been so much work, but it’s all worth it.
Yes! It’s definitely worth it. Getting rid of your debt is like giving yourself an instant raise 🙂
I agree with all of these, especially what you said about debt. Debt can be a huge obstacle that gets in the way of your happiness and your income which is why I’m trying to get rid of mine ASAP.
Heck yeah it can! Good for you Chonce 🙂
I love #1! Debt can really hold a person back, and even make them feel defeated. It’s best to get rid of that debt that’s hanging over your head!
So true! Debt really holds you back and it can take years to recover. Honestly, most people never do, which is why they work until they die 🙁
I’m all about #10 Greg and I know many people who just aren’t “there” in terms of understanding. “It’s easy to think that none of your decisions matter too much” – people think that one decision doesn’t matter, and then it just takes on a life of its’ own!
Yep, everything just snowballs. And, all of those little things may not matter much individually… but when you add them all together, the consequences can be huge.
I like #2. Your money can go a long ways if you make it. To add to this, I believe everyone is their own biggest asset, and should look to maximize their earnings, not just minimize expenses. Create value for your boss, for your customers, and you will end up creating more value for yourself. More value for yourself means more pay, which means more saving and a quicker path to FI.
Thanks for sharing yours list!
Yep, we totally agree. We actually talk about that in the book as well 😉
I don\’t agree with #9.
We didn\’t pay our home in cash.
And even though we have to pay interest to the bank that we\’ll never see again – rent we would also never see again.
Yeah, home purchases are different. Although it is possible to buy a house in cash, most people will need a mortgage to purchase their home. On the other hand, many many many people still over borrow and purchase homes they can’t afford.
Congratulations on the book launch! Great tips in here. I’m on a mission to get rid of my mortgage, which is my only remaining debt, before I’m 40. That would not only free up additional cash flow I’m going to need to send my kids to college, but would also bring the peace of mind of being totally debt free. I despise my mortgage company and it makes me angry that they get to “make the rules” because they hold the debt. Soon that won’t be true anymore!
I hear ya! We’re debt free except the mortgage as well. That should be gone in a jiffy though 😉
Love Truth #5! Telling that money where to go keeps it from disappearing. I love automation for this reason. Congrats on the book!
It’s so true, right? If you have a plan for it, money does what you want it to do. If not, it vanishes.
I hate debts. Whenever it comes to my life, I try to get rid of it as soon as possible because debt is a hindrance for me from achieving my financial goals. Truth #10!
Having money doctor colleagues, I can attest to the massive truth behind #7. So many high income earners are just keeping their head above water because their lives are mostly financed. The big house, fancy luxury cars, kids private schools etc are mostly paid with debt. This is no way to live!