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6 Steps to Financial Independence

Debt is a big deal. Here's how to stay away from all its craziness.

When you’re in your 20s, it’s easy to get wrapped up in the present. You have many, many decades in front of you, so do you really need to worry about the future?

Sorry to be the bearer of bad news, but, yes, you do. When it comes to your money, you absolutely need to start thinking about your future. Your 55-year-old self will thank you.

I’m in my 20s, and I know that a lot of people my age don’t really think debt is that big of a deal. But that’s so wrong.

A lot of people graduate with tens of thousands of dollars in student loan debt. Then, after graduating and getting their first “real” job, they take out a massive car loan, start house shopping, and pile up even more debt on credit cards.

At this rate, our generation will have more debt than any generation before us. We want to live like our parents right now, with the nice car and the pretty house on the pretty street, and we forget it took them two decades to get to that point.

So how can you stop this trend and stay away from all the debt craziness?
I’ve got a few tips for you:

1. Know your limits. Realize that you’re just getting your career started, so you probably aren’t exactly rolling in the dough right now. Keep your spending in check. Don’t spend more than you make. And remember: 20 years from now you’ll have the ability to do a lot of things you’ve always dreamed of because you’ll be much more established in your career.

2. Stay away from debt. All forms of it. If you’re trying to dig out of a student debt hole, throwing more debt on top of that pile is a bad idea. That’s like trying to finish a race by going in reverse. Your No. 1 wealth-building tool is your income. Your income helps you build traction, while debt does nothing but slow you down.

3. Budget. I know, I know. Everybody hates that word, but I promise budgeting isn’t really that difficult. A budget is just a plan for your money. You’re telling every single dollar where to go and what to do.

When you’re first starting out, keep your budget basic by just listing all your monthly bills and expenses (food, gas, rent, etc.) and making sure each dollar “has a name.” It might take a few months to get it right, and that’s OK. Allow yourself some grace and room for mistakes.

4. Stop caring what your friends think. You might have heard of “keeping up with the Joneses.” Well, it’s a real thing. Many of us are tempted to look just as cool and do all the exciting things our friends do. You feel that pressure when you’re a little kid, and it continues through adulthood. But you don’t have to buy in.

The fact is many of your friends are “paying” for their fun with debt, and you don’t want any part of that. Sacrifice a little “fun” now so you can have a whole lot of fun in a few years when you have no debt and even more income.

5. Parents are not a personal bank. How long should you rely on your parents for financial support? Everyone’s situation is different, but I would encourage you to branch out on your own as quickly as you can — especially once you’re out of college. I understand if you’re in a transitional situation and might need to live with your parents for a few months, but you don’t need to set up camp in your parents’ basement. Living on your own has a way of making you financially independent much quicker.

6. The borrower is slave to the lender. Proverbs 22:7 makes it pretty clear that borrowing or taking out loans is a bad idea. In fact, the Bible has nothing good to say about debt. Hundreds of Bible verses warn us about the dangers of borrowing money. Think about it in a practical way: When your brother owes you money, Thanksgiving dinner doesn’t taste as good, right? And that’s not all. You’ll begin scrutinizing every little purchase your brother makes from now on. How could he buy that new iPhone when he owes you money?

Maybe your parents or your college professors told you there isn’t anything wrong with debt. Maybe they told you that car payments and student loans are just a way of life.

But I’m here to tell you they are wrong. I’ve seen families completely change their lives when they choose to pay off their debt and live a healthy financial life.

The great thing about paying with cash is that when the transaction is over, it’s over. You never have to worry about late credit card bills, ridiculous interest rates and calls from creditors.

The best thing you can do for yourself and your future is avoid debt at all costs. Twenty years from now, you’ll be thankful you made that choice.

Get a free online budgeting tool from Focus on the Family at

Copyright 2014 Rachel Cruze. All rights reserved.

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About the Author

Rachel Cruze

Rachel Cruze is a seasoned communicator and presenter, who has been speaking to groups as large as 10,000 for nearly a decade. The daughter of Dave Ramsey, today she uses the knowledge and experiences from growing up in the Ramsey household to educate America’s students and young adults on the proper ways to handle money and stay out of debt. Her book, Smart Money Smart Kids, co-authored by her dad, will release in April 2014.


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