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What Debt Can Teach You

No one is immune to debt – not even the savviest financial individual. Sometimes we do it to ourselves knowingly. Other times, something just comes up and causes us to lean on credit for the time being. That’s life. 

Yet there is an opportunity for tremendous personal growth in these setbacks, especially when you’re faced with a large amount of debt. In fact, when you finally conquer the numbers, you may find the experience invaluable.  

Here’s what debt can teach you. 

Everything about finances
There is no better time to learn all you can about finances than while you’re working to get out of debt. The difference in what you’ve read before and now is that it’s often more meaningful when it directly applies to your current situation. That type of action-driven reading sticks with you. 

Understanding wants and needs
When you’ve made a commitment to pay off debt, you’ve made a commitment to make sacrifices. Because every dollar counts, it’s easier to understand a want, an upgraded need, and a true need. When you scrutinize your purchases this way, you quickly find the frivolousness in your purchasing habits. Developing better spending habits is what will keep you from getting into debt again. 

How to actually stick to a budget
Saying, “I can’t go this weekend, I’m broke,” then buying a pair of shoes the next day is not being broke. However, it’s a testament to your priorities. When you’re serious about your financial freedom, you become serious about your budget and learn to work within those parameters. You’re no longer stretching your budget to accommodate your lifestyle. This is where you truly learn to be happy with what you have.   

You find the meaning of value
Being more selective over your purchases does not mean every purchase has to be the cheapest option. Even when you’re pinching pennies, you’ll quickly realize you may need to pay more for an item that lasts longer than an item that damages easily. Understanding the value in your purchases brings balance to your finances and your life.   

Realizing anything is possible
When you have made and mastered adjustments to your lifestyle to become debt-free, you realize anything is possible. You develop a greater appreciation and relationship with your finances. You also realize how achievable other financial goals become. For example, you’re looking at purchasing another vehicle. Instead of automatically financing the vehicle, you might make a plan to be able to purchase it outright. What you thought you couldn’t live without before is now easy to live without until you have the cash in hand to purchase it.       

What have you learned after overcoming debt? 

Source: Fortunate Investor