Today, it seems like many people are taking the U.S. trend of deficit spending as an example for their personal finances. Whether families realize it or not, more and more people are turning to buy things on credit than ever before. The trick to be debt free is not accept this style of living, but instead to focus on saving up money before big purchases. A common expense that families often use credit is to finance a car. This has become quite popular, but it is a dangerous game to play.

Why Financing Purchases is a Bad Idea

Financing purchases with credit is a bad idea for many reasons. The first and foremost is that you never know what will happen tomorrow. While you may think that your job is safe, tomorrow could change that. If you are wanting to avoid debt, the last thing you want to do is to put yourself in a position where you owe more than you own.

Not only is financing purchases a gamble, but it also makes you pay for that item for years to come. This means that you are committing not only your dollars that you are earning today, but the money you will be earning in years to come. It’s almost like taking a pay cut.

Why You Should Save Money Before Purchases

While our society may not recognize this form of budgeting, there is an alternative to financing major purchases. In fact, it is an essential part of how you can be debt free. The alternative to going into debt is to save up money before making big purchases. Instead of paying for items years after you acquire them, it is a much better practice to save it up prior to making them. That way if an emergency does occur, you can use the dollars from your paycheck to prevent going further into debt.

Saving up for purchases also teaches you patience and discipline. Instead of making purchases on an urge or in a moment of weakness, it forces you to examine whether you really need this item or not. Living a debt free life is never about fulfilling all of your desires. It does take sacrifice from time to time, but it is worth it in my books.