Debt Free Living | Get Rid of Debt
Debt Free Living Doesn’t Have to Be Hard – Read These 9 Tips
The economy in the United States for the past several years, has shown no sign of improvement. In addition to that, American families have been in a buy now, pay later habit. If we want to experience debt free living, some drastic changes in our spending habits need to be in made.
Many of us spend more than we earn, and have no hesitation in taking out a credit card when we see some item that we want. Overall debt is on the increase and many contemplate bankruptcy to get out of their financial difficulty.
So many others live on the financial edge and barely exist from paycheck to paycheck, letting credit card debt fill in the gaps. Folks, this insanity must come to a screeching halt. If we want to stop this perpetual wallowing in debt, and enjoy a debt free living life style, then we have to do a serious assessment of our financial habits.
By following the tips that we list below, we too can act more responsibly. It will also help to improve and hone our money management skills. If you want to be better prepared for the future, then please read on.
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- Analyze and track your spending.
Yes, I mean, create a workable budget that you will be able to follow for the long term. If you have no idea where your money goes, then how can you possibly know where to make the necessary changes? Hopefully, these debt free living tips will help.
Some individuals do this with a pencil and paper while others get a low cost budgeting program. I personally prefer the software program and recommend one called You Need A Budget. And no, I’m not an affiliate of this company.
I do know the software and have used it and it does emphasize getting rid of debt. It will help you to get a handle on your spending patterns (habits).
- Set up a spending plan.
By that, I mean base your current month spending based on the previous month’s income. Don’t base purchases on your wants or desires. And above all, don’t try to outdo your peers by buying bigger and better toys”.
Justify and prioritize your purchases, and make good and wise decisions. Remember, you’re in for the long term because this is not a short term fix.
- When you go out, leave your credit cards at home.
The temptation to buy is usually stronger if a credit card is available. It’s been proven that you’re apt to buy 33% more if you have a credit card instead of using cash.
- Budget for and payoff outstanding debt.
The frugal way is to select the debt with the highest rate of interest and pay that off first. This saves you money paid as interest. Some others, say to use the Snowball method. In that method, you select the debt with the lowest balance and pay that off first. Proponents of the Snowball method say that by doing that, you get more motivation. I say that whatever method works for you, is the one you should use. Just do it and get rid of debt. Make sure that your budget has a figure for debt repayment. Don’t just make minimum payments and expect that to work. It will not.
- Create a savings plan in your budget.
Put money away every month from your budget to save for the future. You need an emergency fund, and you must also save for retirement. Don’t expect Social Security to be around down the road.
If you want a prime example of money mis-management, this fund is the place to start. Never, never follow the example of these idiots in government.
Too many individuals today are heading into retirement and instead of being debt free, they carry an increasing amount of debt. This is expected to increase over the years as the cost of living continues to rise.
- Stop impulse buying.
This area, the discretionary expenses, often gets us in trouble. Vacations, entertainment, and buying those “toys” need to be cut to a minimum or eliminated. Use that money to pay off debt and to save.
- Don’t create any unnecessary debt.
This one tip speaks for itself. Simply making minimum payments on credit card debt will never pay it off. You need to strongly resolve to eliminate debt and be able to experience debt free living. Most individuals don’t have the cash to cover a home purchase, and by necessity, must use a mortgage. I found a very good web site that will guide you in choosing the best mortgage lenders. They did a lot of research that will be helpful to you.
- If a credit card purchase can’t be paid in full on the next bill, don’t do it
Paying credit card interest is a big waste of money.
- Keep your financial promises.
This applies to any type of debt you are now carrying. Defaults on credit cards, auto loans, mortgages, and student loans are increasing year to year. The student loan area is especially bad.
Loans are being refinanced, and special payment terms are being instituted. Some individuals will be old and gray before they repay their student loans. Besides that, the government can now attach your social security benefits for a delinquent student loan. In addition, filing for bankruptcy will no longer eliminate student loan debt.
As you work towards being debt free, don’t be afraid to seek professional help if you need it. Sometimes you simply can’t do it alone. In those cases, consult a licensed credit counselor or a competent financial advisor. Work hard to eliminate your debt so that you too can enjoy debt free living.
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Gust Lenglet – Platinum Author
