How to Become Debt Free - my story

Have you ever wondered how to become debt free so you don’t have to worry about making a mortgage payment? Well, there are many approaches to accomplishing it, and I’ve taken one of those paths.

I’d like to share with you why I did it and how I did it. My approach won’t work for everyone, but it could be something that will work for you.

First let’s look at my motivations. We all do things because we’re motivated, because we’re inspired.

My Motivation to Live Debt Free

For me, the purpose of being debt free was to have a sense of security, to be able to relax with respect to my need to earn income. I wanted a sense of permanency, and owning what you live in and on can give you that kind of feeling.

It may sound a bit selfish, but I’ve also worked hard most of my life, and I was tired of working so hard. I wanted a break in the action, a break in the stress, and I wanted to get away from business travel. I had seen the world, and it had seen me, and it was time to plant some roots in real estate that was mine.

In order to accomplish this, I had to be able to attain “more life and less work,” and that meant not having a large monthly payment each month so I could retire and relax a bit from regular non-stop work. As has been the case throughout my life, I had my own definition of retirement, and I was going to make it happen. I wanted to retire early and enjoy my "gray haired years" with good health.

This is how I set my sights on becoming debt free. Now, I only had to figure out how to become debt free.

Setting the Stage

In preparation for becoming debt free, I had paid cash for my vehicles, used my single credit card primarily for business purposes (so expenses were regularly reimbursed) and I paid it in full each month. I had no other debt, and my bankruptcy was discharged – paid in full.

In addition, I have always been the type to pay my insurance, taxes and other annual obligations in full on demand. I don’t stretch things out by paying them each month.

In addition, when I purchased my home in the country, I had made a substantial down payment using money that I had saved for that purpose. A larger down payment meant that my monthly mortgage payment would be smaller, and paying off the mortgage would be easier when the time came to do that.

My Plan for How to Become Debt Free

I’m relatively good at planning; at least the results of my efforts would suggest that. Perhaps I’m not so good at planning as I am at getting what I set out for. In either case, my approach to things seems to work for me, and I was going to make it work for me again with respect to becoming debt free.

The plan was in my head, but it was a plan. I would wait for a large job that seemed like it offered steady income, and that would allow me to make large payments against my mortgage over the course of a year, and end up paying off the mortgage right at the end of the year. I figured this was how to become debt free quickly and decisively.

The plan also included having a nice pile of cash on hand in the event that I needed some funds for unforeseeable events. I didn’t want this exercise in how to become debt free to turn into how to sell my house quickly because I didn’t have any liquid assets. With liquidity a non-issue, I was ready to pay off the house.

Here's How to Become Debt Free – just do it

With a series of large payments over a year, I narrowed the gap between the bank owning my estate and me owning it. In December of that year, I called to get the final payment amount. It was a little over $7,000. The notice arrived at the house with instructions as to the amount owed and the need to overnight the payment to a particular address.

Yes, the extra expense of overnight delivery is required if you’re going to pay the amount on the day before you expect it to settle. I simply mailed the check a week in advance – regular mail with a first class stamp. I called a few days later to verify that the payment was received and the transaction would take place as I had expected.

Everything was set. I knew how to become debt free, and it was only a matter of days before I was going to be just that.

The Dramatic Results – well, not quite

Did someone say “drama?” Sorry, there wasn’t any at all. No palpitations, no hyperventilating, no celebrations, not even a hoot or a holler or a yippee about the whole thing.

My sweetheart Ellen would ask me periodically if I was excited about paying off the mortgage. I never was, but I assured her that it would soon hit me. Just days before the final payment was made, I still didn’t have any exuberance regarding the upcoming event. It was a non-event as far as I was concerned.Months later I still didn’t have a feeling of joy or exhilaration regarding having become debt free. Why was that?

I’ll tell you why.

It wasn’t an accident. It wasn’t a surprise. I didn’t hit the jackpot. I didn’t “luck out.” No one from Publisher’s Clearinghouse unexpectedly showed up at my door with one of those oversize checks.

I planned how to become debt free, and I worked the plan and made it happen. That’s how to become debt free as near as I can tell. In 20/20 hindsight, my mortgage was as good as paid off the moment I formulated the plan and put it into motion. That’s why there wasn’t one bit of drama involved. I was happy and feeling good about the whole thing, but that’s it.

I’m not bragging, it’s just the way my approach to life works – identify an objective, create a plan, work the plan, adjust as necessary, keep working the plan, and then enjoy the outcome.

I told you at the start that my approach to how to become debt free won’t work for everyone, but it certainly worked for me.

Done with How to Become Debt Free, back to Basic Financial Planning

There certainly is a broad scope of topics here at Frugal Living Freedom. When you think about it, money permeates so very many activities in our lives, therefore, being frugal encompasses a wide range of interests, from being employed to taking a vacation, and just about everything in between. Enjoy the variety, pick up some new ideas, and start making frugality a part of your signature.

I'm a big proponent of being debt-free, and I mean entirely debt-free - no mortgage payment. It's not essential for financial freedom, but you'll love the feeling once you get there. If you didn't have a rent or mortgage payment, how much more could you do for yourself with your current level of income? I suspect plenty.

If you ever hope to see an abundance of wealth, you need to plug the hole in your boat. The wealthy don't necessarily make lots of money, instead, they know how to hang onto what they make, and make it work for them.