Debt free is NOT financial freedom BUT it’s a good thing too.

Many years ago, a close friend told me that she’s very close to finish paying off her RM700,000 loan for her 3-storey landed property. That was just a few years after she had purchased the property. She was worried with debts. I think she is now debt-free. She also goes for overseas holidays BUT only when she has saved enough for it and when she’s there, she does not spend beyond what she has planned. I am not joking. She keeps a full list of every cent she spends on a daily basis.

A relative also told me that he hates to carry debts and will continue to pay up for his home loan as soon as possible before thinking of the next investment opportunity. His SUV was supposed to be fully paid for within 5 years which is much shorter period than most car loans including mine. For both, their focus is on becoming debt free. During times of crisis, these people will sleep better every night versus someone with a lot of loans to be paid.


Here are 4 things you could do if you seriously intend to be debt-free at some point in your life.

There’s no need to impress anyone. The latest new handphone of RM5,000? Forget it if the current one still works well. If the current one needs a replacement, then finding out all the affordable options of 3Gb RAM, 32Gb storage and a good enough camera will just be RM599 or lower… That RM5,000 will mean an instalment of 12 months and the RM599 is just one time payment, thus no debts incurred. Would our friends be awed by our RM599 phone? Reminder, there’s no need to impress anyone…

No savings, no holidays, please. I know, the flight ticket is cheap. It could even be free and we only pay the airport fees for example. However, in a typical trip, the expenditures other than the flight ticket alone is likely to be much bigger. The food, the accommodation, the entrance fees to attractions and the attractive souvenirs will usually use up a lot more than what we anticipated. This is why if we go for holidays only with our savings, then we will not incur debts which we will need to keep paying after our holidays.

Disciplined and in full control. Browsing online and saw something you wanted to buy? In the mall, walking past the handbag or the shoe shop and both were showing their latest designs?. Loving the new designs and having the intention to own everything new is quite common. However, if we think along the lines of being debt-free, than buying and buying will mean paying and paying for many months ahead. Remember, a few more of these online or mall visits will mean debts beyond just months.

Debt-Free is a lifestyle. How much we earn per month does not determine how much savings we have. (Please still try to climb the corporate ladder and earn more yeah) It’s how much we spend that will determine how much we have at the end of the month. It’s also how much we spend that will determine if we start to fall into the debt hole which gets harder to climb out from the longer we fail to realise it. For the ones who wants to be debt-free, they need to make this into a lifestyle.

By the way, financial freedom / independence is not the same as debt-free yeah. However, debt-free will be a good foundation for us if we intend to start thinking about investing. As for how do we start our investment journey, that’s a totally different article yeah. Perhaps we start by reading about the reasons to start property investment then? Click here. By the way, in Malaysia, bad debts are getting worse yeah. Materialism is one major cause of it and the acceptance of the price of a cup of coffee in a cafe is not helping too. Read here. All the best and please do not blame anyone when our financial discipline is in a mess yeah.

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