What is a Debt-Free Life?
One of the biggest questions Singaporeans and people worldwide ask themselves is this: is it still possible to live a debt-free life? The cost of living anywhere, especially in Singapore, continues to rise. Sadly, income isn’t proportionately increasing, negatively affecting the economy in the process.
However, suppose you remain positive and set realistic objectives while embracing failure as an essential learning experience. In that case, it’s possible to live a debt-free life away from all the shackles and chains of financial services. While this advice might sound counter-intuitive, learning which products are critical for your daily life plays an enormous role in living debt-free.
How Many Singaporeans Are Debt-Free?
It’s safe to assume that virtually no Singaporean is ever debt-free. Singaporean parents are paying a home loan for their properties or regular rent payments. Plus, they’re paying for student loans. Alternatively, students graduating from school will start paying their student loans, plus any penalties their parents have missed.
This fact does not include any outstanding consumer debt a Singaporean has. According to CEIC Data, the total Singaporean household debt, including home and student loan payments have reached S $320.3 billion in October 2020. This data indicates that every head in Singapore pays over S $55,000 in debt their entire lifetime.
10 Key Traits of Individuals Free From Debt
Objective-Driven Approach to Money
Saving money is a virtue, and an economy needs consumers to spend their money to uphold the markets. It’s always problematic for everyone when consumers are extremely saving or spending their money. Therefore, an objective-driven saving and spending approach will work the best for any situation.
In doing so, Singaporeans and foreign workers can save enough money and spend it on something they need. If you feel that you have nothing to spend on, save enough money while listing your property needs. Doing this prevents you from borrowing too much money from financial institutions and licensed moneylenders.
Never Gives In To ‘Hyped’ Promotions
If you subscribed to eCommerce mailing lists, you’d find a hyped list of items under an enormous sale or discount. Wise spenders with debt-free lives always scrutinize advertisements and marketing strategies they encounter. A decision to buy a product or service before regular consumer reviews is never a good one.
Don’t give in to hype or your “fear of missing out” (FOMO). Instead, consistently list your wants and needs. If you feel like giving into an impulse purchase, wait for five minutes before finalizing your decision — you’re highly likely to change your mind afterward.
Balances Their Wants and Needs
We’ve mentioned this in the past few items. Decision-making at any level — whether for home budgets or departmental responsibilities — requires a full list of wants and needs. Singaporeans must always prioritize their needs before the items they want.
However, it doesn’t mean they should give up on their wants because they need to survive with their needs. Saving money isn’t necessarily good, and saving up for a well-deserved prize is still everyone’s need.
Patient and Disciplined Financially
Patience is a virtue and practice that most debt-free individuals possess. They can easily give up on extremely low initial interest rate promotions because they have an established plan. Additionally, their discipline helps them understand that not all sales and discount seasons are essentially good for their budget.
Individuals free of debt consistently scrutinize a product or service’s every aspect, including its long-term value, manufacturer dependability, and consumer reviews. Whether it’s a want or need, patient and disciplined spenders take their time and meticulously investigate first.
Prioritizes Their Financial Responsibilities
Segregating and prioritizing their needs, individuals with zero debt meet their financial responsibilities without fail. In doing so, their envelopes for monthly bills and necessary loan repayments will consistently be ready.
Most indebted Singaporeans and foreign workers often misjudge the products and services they need. In many cases, they’re impulse buyers, forgetting their financial responsibilities in an instant. However, zero-debt Singaporeans have a consistent record of zero credit card debt and low loan application attempts.
Puts Value Before Cost
The best way to save money is to identify a product or service’s value over its cost. Here’s an easy explanation: everything that is cheap isn’t always high-quality, and everything expensive isn’t always of high quality. Zero-debt individuals investigate and look through a product or service’s usefulness.
For example, before buying a smartphone, buyers free of any debt check if their device is incapable of supporting new applications. Additionally, they scrutinize whether the new models have much higher performance than their current device. If any condition points to better value, they will highly likely make a purchase.
Can Say ‘No’ When They Want To
Saying “no” stems from a full understanding of priorities, which every wise borrower free from debt possesses. If you’re saving up for college as a working student, you’ll choose to limit expensive weekday celebrations other students and friends invite you.
Individuals free of debt can say “no” time-consuming, poor productivity situations, too. They recognize that time is a much more expensive resource than money, especially if they’re focused on particular projects.
Practical and Does In-Depth Product and Service Research
It’s easy to give in to the hype and manufacturer-sourced positive publications about products and services. However, in the internet age with readily-accessible information, data is key to the many productive purchases of individuals never struggling with debt.
Often, successful borrowers with zero standing debt perform in-depth research on manufacturers of greatly-hyped and advertised brands. By understanding the manufacturer’s core values and practices — as most investors do — wise borrowers make the most practical and wisest decision all the time.
Understands The Right Time to Give and Receive
Generosity is a great value, and even people who experience performing generosity for the first time feel positive and dignified despite their current financial standing. However, everything needs balance, and exceptional individuals with zero debt despite using financial services recognize the best time to give and receive.
If they have more than enough for their financial plans, they never let their cash “get into their head” and hoard more. Wise young professionals may choose to buy their parents an item necessary for their daily routines, such as appliances. Debt-free individuals doing well with their savings and emergency fund and foresee decades of financial stability are most likely to donate to charity or perform altruistic acts.
Does Not Compare Themselves to Others
The fear of missing out emanates from buyers who compare their situation with other individuals. Additionally, trendy shoppers compromise their budgets for their social validation needs. All of these behaviors point to a need of relevance and attention, with atrocious spending being enablers of such behavior. This is a behavior wise savers and investors shun thanks to their financial plan and discipline.
Is it Good To Be Debt-Free?
As we’ve mentioned earlier, it’s virtually difficult to live a life without debt in Singapore or any part of the world. It’s good to be debt-free, but it’s better to be wise about debt management. Loans, even those with high-interest rates, are useful for persons in a time-sensitive situation. For example, it’s wise to take on a licensed moneylender’s quick personal loan service with a substantial interest rate in time-sensitive situations, such as medical emergencies.
While the borrower hasn’t understood whether they are making enough cash to pay off the licensed moneylender personal loan in one year, it allows them to get immediate medical treatment because lives have a higher value than savings or future debt.
How Does It Feel To Be Debt-Free?
Individuals who have worked hard to live without debt established a plan for themselves. Their focus enabled household-based planners to have clear communication and emotional stability. The journey for individuals chasing a debt-free life is challenging, but the returns are undeniably rewarding. Individuals who live without debts have less anxiety, attachment, better mental health, and a full understanding of the value and wise spending.
A Debt-Free Life is Free of Any Mental and Financial Shackles
It’s nearly impossible to live without debts because we need enormous cash amounts for necessities. A life without debt is to make a plan that gets individuals outside their existing financial shackles by practicing all the values and disciplines we’ve listed above.