Simple Technique for Staying Debt Free and Not Homeless

If you’re the kind of person who likes to throw away money for fun, disregard this article. For everyone else, get a calculator and make sure you have enough room in your closet for the extra amount of cash you will get after reading this article.

According to accredited sites, one of them is the site of the Federal Reserve, only around 20% of the world population is debt free. Meaning, that 80% of the citizens of the mother Earth are owing money to the bank.1

Gosh, I wish I was a bank right now!

Sadly, the graph is ticking up and probably in the near future, everyone in the world will owe money to someone.

We all know that being in debt is an issue. Not only you never actually get the chance to receive your full salary, but you’re also living in fear: What if I’m fired from work?; What if I have a health issue and I need money?; What if I don’t have enough clients this month?; What if I end up living on the streets?

The dread of all these questions left unanswered might be harmful to both your health and your physical existence.

Here, I’m going to show you what you can do to avoid paying interest charges month to month to your bank and keep your home.

Why People Stay In Debt?

Well, the main reason people get money, they don’t have, from institutions, they don’t quite know or understand, is to spend them on things that might be essential for their surviving in the world. Most common scenarios are:

  • Loan for a house;
  • Student loan.

The above two, are actually considered investments. I do agree that paying for your own house is better than paying rent, but I can throw an argument about the later – the student loan.

Still, let’s say that these two are “common”, “necessary” debts.

The actual problems come from the side. The other tiny, at first glance, bills, that at some point become a large portion of your monthly expenses.

I know a lot of people who are getting new phones, every year, and are putting the payment on their credit card, every year.

But that’s just the start.

Eventually, everything that they can’t afford now, is going to paid with their credit card: new TV, new couch, vacation, even new shoes.

If you use your credit card a few times this will soon become your default spending method and eventually might leave you homeless.

Being in debt is a way of living

Above all, the debt problem people have is a mindset problem. It’s a form of addiction.

Since we’re living, NOW, we want to be happy, NOW. That’s why buy things, NOW. Not after 10 months when we’ve saved enough money to buy a new TV.

Buying leads to gratification. This is not a secret. We get to experience the joy of dopamine inside our brain when we buy stuff. That’s also the reason we’re checking social media every 3 minutes. But that’s another article.

And like everything else in life, when we do something regularly, it becomes a habit. There are good habits there are bad habits. Few examples:

  • Good habits: Eating salads, exercising, spending wisely;
  • Bad habits: Smoking, drinking, spending restlessly.

Yes, how you spend your money is also a habit.

If you ask me, for example, I will never – or let’s say in 99% of the cases – buy something when I don’t have enough money saved before that. I won’t get a new phone until I’ve saved the needed amount for the phone I want in cash. When I need to get something new, I will sit down, calculate how much money I’m willing to spend, and set a schedule. For example, I’ll force myself to save $100 per month and get the new phone after 7 months.

That’s what I do. 

I consider this my way of living. I don’t get something until I can actually afford it. And by affording it, I mean actually having the money in me and not getting a loan from the bank or from my friends/family.

But that’s not what a lot of people are doing.

A lot of people, as mentioned above around 80%, have some sort of debt. Not that all of them are spenders, there are also people who have business loans which in a lot of occasions is something you can’t go without. Still, there are a lot of guys/girls who simply can’t wait a few months to have the money in them. They want new shoes now!

By now, I mean, “I should already wear them!”

Banks actually have profiles for the two types of spenders: transactors and revolvers.

Are you a Transactor or a Revolver?

Let’s explain what’s the difference:

  • Transactors: Type of people who use their cards for purchases and pay off the balances each month;
  • Revolvers: Type of people who carry balances on their cards, paying interest charges month to month.

The transactor, don’t even pay interest because they cover the payment long before the bank realizes someone took something from them. 

Revolvers, on the other hand, simply leave the payment and “get used” to it as something that will be a long-term commitment. The main reason they don’t cover the payment, it’s because they can’t. “New shoes come with a new bag and a new pair of jeans. Ugh, did I mentioned the coat?”

The reason I’m explaining this in such great details is to understand that it ultimately comes down to your willingness to control your emotions.

Revolvers are nothing more than people who can’t accept delays.

It’s not that you can’t survive without a new phone for a few more months, you simply don’t want to.

Generally speaking, we all want things now, rather than later. Obviously, for a good reason. Quite literally, this might be your last day on Earth. It’s brutally honest, but it’s true.

And this type of thinking is what a lot of manufacturers are counting on: “We only live once; Today might be your last day;” etc.

Except for the two factors we already mentioned: 1) We love instant gratification; 2) We’re going to die, there are other conditions that move the needle closer to the lack of discipline in how we spend our money:

  • Social media and media in general;
  • Friends and people around us;

Basically, the minute you wake up, unless you stay at home for a large part of your day and you don’t use social media, you’re exposed to propaganda.

Commercials that you need a new bike; Your friend just bought a new car and your mind simply can’t resist considering the opportunity to own a new car; Posters in the city of the latest fashion trends; Updates from friends in social media that they got a new book or something.

Even if you’re sitting alone, at home, reading a book or simply thinking, there is a high probability that your mind might come up with something that you absolutely need to own:

  • “I need a new pillow for the couch”;
  • “I need a new book”;
  • I need a new phone so I can take better pictures while I read books so I can post them on Instagram”.

Throughout the whole day, we’re bombarded by thoughts and messages about acquiring new stuff. New stuff makes us happy, new stuff makes us better, thus we want more new stuff.2

All right then genius, but what’s your solution? 

Here’s one proposed idea:

Ways to stay out of debt

Spending less than you earn is the most common and the most logical advice. But as I already mentioned in the beginning, people don’t do that, that’s why, around 80% of the population is in debt and a large part of these people are living paycheck to paycheck.

I can throw the advice “spend less than you earn” here, but it won’t make a lot of sense.

We’re more emotional than we are logical creatures.

“When dealing with people, let us remember we are not dealing with creatures of logic. We are dealing with creatures of emotion, creatures bristling with prejudices and motivated by pride and vanity.” Dale Carnegie

We fully understand that if we earn $1000 per month, and we spend $1100 for the same interval, we’ll owe $100 to someone. It’s simple mathematics. Whether this will be the bank, your closes friend, or you get the money from under the mattress, it doesn’t matter.

Despite the above, we still want what we want!

“I know I do have money now, but that new Gucci bag is so nice tho!”

Humanity is more emotionally-driven than rational.

It’s in our nature to be such.

Unfortunately, it’s hard to fight nature. It’s like going against the gravity.

So, is there really a solution?

Yes, one extraordinary solution:

Be honest with yourself

I know, I know.

It sounds stupid.

Ignore the statement for a bit and answer this question:

Are you buying things for yourself or for what other people will think of you?

Come on, be honest.

I owned more than 20 shirts before and the same amount of jeans. My “goal”, was to wear different clothes every single day. I wanted people to see me like this dude who wears only shirts. I wanted people to like me.

You see, I wasn’t really shopping for me, I was shopping so that people can have this vision about me.

Yes, it’s nice to have new things, but in reality, you don’t need them.

A lot of my shirts were quite slim and they often didn’t feel comfortable around my belly – yes, I was kind of fat. Also, the shoes I wore back in the days weren’t exactly the shoes I wanted to wear, they were simply needed to complete my look. Still, I was sacrificing the feeling of comfort in order to look like this gentlemen.

In reality, I wanted to wear sneakers, jeans and comfy t-shirts. Hence, the best money advice I can think of is this one: Be honest with yourself.

  • Do you really need a new phone?
  • Do you really need a new TV?
  • Do you really need to go out every weekend?
  • Do you feel comfortable with not having enough money?

I’m 100% sure that the answer is No to all of the above questions.

Until you are 100% honest with yourself, you won’t really stop buying stuff you don’t really need and you won’t soon get out of debt.

Only when you’re 100% honest with yourself, you will reach a state where you’ll be careless about what others think of you – whether you’re dressed by the latest fashion trends or no.

Be honest about how much money you spend each month, in total. Sit down and actually calculate your spendings. How much money you want to save? How much money you want to keep and invest?

Minimalism, as a tool, comes in handy in such situations.

When you’re honest with yourself, you will understand that you often need less than what you think you need.

Let’s put that in another way:

Society wants to make us believe that we’re not complete if we don’t have the latest clothes, phone, or whatever, but it’s not like that. They want to convince you that you’re not good enough if you don’t own X thing. They want this installed in our brains because they want our money.

But in reality, you’re still the same no matter what you get.

You will be the exact same person if you’re driving a sports car or a van. The exact same person if you’re wearing a suit or a t-shirt with a jacket.

Final Thoughts

All these things about budgeting, “making a list” of all of your debts, talking to a specialist, sound super exciting but don’t really solve the main problem – your lack to control your spending habits.

Yes, you can surely create a list of your debts, but it won’t quite matter if you start drooling when you see the new commercial of the latest iPhone.

If you really want to be debt free, you should tackle the core issue. And the main thing is your perception about what you really need in life. If you’re convinced that you don’t have enough, you will spend more than you earn and you will surely ride the I-owe-money-roller-coaster-each-month for years. No list will get you out of debt.

But if you sit down and have an honest conversation with yourself, you can finally realize that there is a problem, and this problem won’t be solved by getting more (or making a list), it will be resolved by understanding how much is enough and neglecting everything and everyone else.


  1. The sources to back this statement are the following: MoneyFool;
  2. At least that’s what we get from the commercials: Buy this new shampoo and you’ll have better hair.
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