Living Debt Free… Is it part of your survival plan?

Did you know that the average American family has over $15,000 of credit card debt and a staggering total debt of over $75,000? And if that’s not scary enough, when you factor in the $130,000 that every American taxpayer would have to shell out just to pay off the national debt, our country’s financial situation starts to look pretty bleak.

foreclosure sign

So what does living debt free have to do with survival anyways?

Well, in my opinion, Everything! Living debt free is an extremely important part of any well-rounded survival plan. Living a debt free lifestyle is all about your long-term survival. It’s about thriving, living a comfortable existence, and having peace of mind while everyone else is living amid the chaos.

But what if the economy collapses?  How will living debt free help you survive?

As the country falls deeper into economic turmoil, living a debt free lifestyle can help shield you from some of the initial pain. As things start to get worse, creditors are going to step up their collection efforts and really start to come after debtors with a vengeance. The last thing you need prior to an economic collapse is a sheriff knocking at the door because you didn’t pay your bills.

Remember, debtor prisons were once a real thing here in America and if things get bad enough they could make a comeback.

5 Ideas for Living Debt Free:

Writing a Budget

Establish a Budget

It’s really amazing how much money Americans waste. Establishing a written budget will help make sure that every dollar you make works for you and not against you. At the end of every month, you should have a written plan for every dollar that you will bring next month.

Establishing a budget can help you to realize how much money you spend on things that really aren’t necessities.

Use the Envelope Budgeting System:

money in envelope

If a written budget seems a little tough, you may want to consider the good old envelope system. Basically, you put your monthly budget into various envelopes; food, gas, utilities, rent or mortgage, entertainment, preps, etc….

This can help you make sure you’re not spending more than you should be on a certain category (like entertainment).

The Debt Snowball:

Pushing a snowball

Paying off debt can sometimes seem overwhelming which is why Dave Ramsey’s Baby Step #2, The Debt Snowball, is a great way to get started. For those of you who are not familiar with Dave Ramsey, he is basically one of the top debt free living advocates in the country. In his book, The Total Money Makeover, he outlines 7 baby steps to living a debt free life.

Baby step #2, the Debt Snowball, suggests that you list your debts from smallest to largest and then start with the small debts first. The rational is actually pretty simple; the motivation that you obtain from paying off these small easy debts will create a snowball effect that will help you stay motivated when the going gets tough.

As Ramsey points out in the book, Personal finance is 20% head knowledge and 80% behavior. When it comes down to it, we all know what we should be doing; most people choose not to do it.

Stop going in debt by maintaining a high credit score.

Credit Cards

One of the biggest scams that the financial institutions have managed to pull on Americans is the myth that your credit score somehow equals your financial security. Nothing could be farther from the truth; in fact, keeping a high credit score only ensures one thing. It guarantees that you will constantly be in debt!

The only way to maintain that high credit score is to continually borrow money, pay that money off, and pretty much live in debt for the rest of your life. The only thing that having a high credit score means is that you are good at borrowing money, not good at making it!

Make More Money


This one is a no brainier; the only real way to combat the increasing cost of living is to start making more money.

In the long run, one of the best ways to increase your cash flow is to go into business for yourself. Whether you’re a mechanic, a car salesman, or even a factory worker you have talents that can be taken outside of the workplace. Figure out what you’re good at, and find a way to make money off of it.

Let’s take the mechanic example. Instead of making your boss rich, why not buy some old clunkers, fix them up, and then sell them?  Even if you do one every couple of months, imagine what you could do with that extra income.

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  1. I couldn’t agree more with you that one should live debt free. It’s unfortunate that families (and even our country) chooses to live so carefree with debt up to their eyeballs.

  2. We did Dave Ramsey before he was nationally known. My huusband became disabled and guess what we survived because we were debt free! My son @ 35 became disabled also…. guess what he lived a modest life and was debt free also and survived until he was approved for his long term disabilty. We never expected cancer to happen to our family but sadly it did….Just try the Dave thing it truly is Finacial Peace. Cut up the credit cards and snow ball the debt it gives you power over your life.Plus it will allow you to help others as you will have more to share. Always live on less than you make and it will work. (FOR ALL OF THE PEOPLE WHO ARE JOBLESS WE ARE PRAYING FOR YOU EVERY DAY…BEEN THERE DONE THAT TOO)

  3. @Sherry-thanks for sharing the experience. That really is cool.

    We are peddled so much BS these days that by the time you take notice, usually a lot of damage has been done.

    The envelope thing is an oldy but goodie. One thing my wife and I have done is set aside “fun money” that we each get every week in cash. We take it out, put it in our wallets, and when it’s gone it’s gone.

    Another thing that’s been helpful-using a google doc spreadsheet for our budget. That way we can both have access to it from work, home, or even if one of us is traveling. There are a lot of budget softwares out there, but something about google is just so easy.

    Finally, a good hard look needs to be given to education costs these days. One of the biggest ticket debts of many Americans these days is student loans. Many people don’t get out of student loan debt for DECADES afterwards. The College Conspiracy is a really good documentary showing real debt scenarios, and whether or not college even makes financial sense for many people…

    Thanks for the great post.

  4. Debt isn’t necessarily a bad thing. You just have to manage it. With interest rates where they’re at right now a good credit score can keep you from dipping into that emergency fund. Without a good credit score you’re going to have a lot more trouble going into business for yourself, too. Especially, if you’re just a working stiff living paycheck to paycheck. This is a horrible time to be a saver. With interest rates where they’re at and inflation about to kick into overdrive you may just see the buying power of your emergency fund disappear in a few years if you’ve just got it sitting in a savings account or a safe somewhere.

  5. And I agree with the student loan comment. For most people, going into massive debt to fund a college education is the worst financial decision they can make. That’s mostly because student loans follow you for life no matter what you do. College educations are also ridiculously overpriced and they’re just getting more and more expensive.

  6. that is why Extreme couponing is so popular, the working man can battle inflation and prep on a budget i got 224 dollars worth of canned goods for 77 dollars using coupons,

  7. I’m 34 and the only debt I have is a mortgage. No credit card, no line of credit, no student loan, only a mortgage. Really helps with the prepping!

  8. Ok most of you are going to throw a pie in my face, but I just have to say it.
    Yes I am working toward cleaning up my debt. BUT if everything goes down, then we will all be in the same boat. They can not get blood out of a turnip is the saying. If Social Security throws up.. then we will all be penniless. Not just me. Paying of some items is well worth the effort. The home, the car, DO NOT prep with credit is a big you-bet-ya. If the economy goes all money goes. How can debtors collect if there is no money to be had? Try to be safe, but do not beat yourself up if you have some debt. It is the times, we live in.
    Try to do your best to free yourself, but having a little credit will keep your ball rolling. If you want a car a home…. you need credit.
    Oh I like berry pie the best. Cordia

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