What Does Living Debt Free Mean | Easy Steps – Everybody wants to get riches, to be rich and live a comfortable lifestyle. No one desires to live a poverty stricken life full of insecurities and debts. We live in a society which dictates our success and future by how wealthy we are.
We strive hard to work smart, invest and make positive progress in life which can lead us into the perfect path as we meet all our goals and objectives in life. We sometimes request soft loans from friends, family members or Sacco group and at times apply for loans from banks.
How many of you are currently fighting debt? Perhaps it’s from student loans maybe it’s due to credit cards. Whatever the reason might be, this must be the year that the debt free living becomes a priority. This must be the year which you just tell debt goodbye for good.
We can speak about the way we need living, but it requires more than simply talk. It takes action. Kicking debt out of your life isn’t as difficult as you may think. It merely takes a solid strategy and a lot of dedication.
Debts can seriously break your financial progress and allow you to wallow in the pool of doubts and hiding from your friends or cooperatives that you’re owned. What exactly do you will need to do in order to start your journey to debt free living? It is simple, you will need to follow the following eight measures.
Step 1. Understand that you have bills to repay and pay them enthusiastically
So long as you live in the modern world, you will have bills to repay. When you receive your bills, kindly choose a bold step and pay enthusiastically. You have to be happy to settle everything you are owned.
It is a matter of fact which you shouldn’t pay unnecessarily. If you pay unnecessarily, you are just dancing to the tune that the cash is difficult to get and you are not pleased with the turnout of items.
Step 2. List out all of your debts
Start by listing out all the debts by their rate of interest. The maximum speed will be on top of your list. Why? Because it is the debt costing you the most money each month.
Now you have everything on paper, then you now get a visual concept of what is before you. You’re able to see that debt you are likely to concentrate on the first, next, etc down the list.
Step 3. Start setting up an emergency fund
Do you have an emergency fund set up on your own? Otherwise, it is time to get a savings account.
Emergencies are certain to happen to all of us. It may be dental function that insurance won’t cover. By having a rainy day fund, all these surprise expenses won’t cause a major setback to your budget.
So how much should you have on your emergency fund? Some of us will tell you which you want three to six weeks worth of expenses. While this is an excellent long-term goal to get, it’s not reasonable while paying off debt.
Instead, start off small putting away money every month until you get $1,000. This is a good place to start.
Step 4. Place Your bills on autopilot
Automatic payments are among the ways. Instead of making a payment every month on every bill which you have, you may set it and forget it.
There are lots of benefits to automating your lifetime. Not only are you going to make things much easier for yourself, but you’ll reduce the risk of using a late payment. The last thing that you need while you’re working so hard to pay down debt would be a wasteful fee.
Step 5. Downsize your life — forever or temporarily
The last thing many people want to do is eliminate the things we like. But, there are instances when it is the ideal action to take.
Begin with having a look at the budget you’ve created earlier. Are there any things you could do without, even if it’s only as you are paying off debt?
What about your cable television? Did you know the typical cost for DirectTV is approximately $101 per month? With alternatives like Sling TV or even Netflix, you might cut the cable and never go back.
Are you spending too much money eating out? The average American will spend $232 a month ingesting a meal outside of their dwelling. What if you cut this in half? The extra $116 each month may be quite useful for your debt investment plan.
Step 6. Transfer your credit card accounts
Most of you have probably ditched your credit cards at this point. But you may be surprised to know that a credit card may really be to your benefit.
In case you have many high profile accounts, you may use a balance transfer to transfer everything to a card. Most balance transfer credit cards may have a introductory 0% APR offer. This will help you pay down your debt without accruing finance charges on the way.
Step 7. Track your spending
The secret to living a debt free life is to clearly know how much you invest and how much you save in the exact same moment. You have to monitor your cash flow and in the close of the day that you will get to understand and have confidence of your entire fiscal spending.
Step 8. Take a look at your insurance and review it
Financially and debt advisors always tell their customers to be keen in their insurance and examine its plans always. You will need to appear over your life insurance needs. You want to follow along with test it covers over 10 occasions of all your earnings. When you have children less than ten decades, then your life insurance should also pay on debts incurred by the larger family.
These are definitely the most proven ways which will easily assist you get out of debts. You need to come up with a plan and understand that invoices are there to be settled. Whatever money you borrowed, so be willing to pay as per the arrangement of agreement rather than about pilling debts because they’ll return to affect you later in life.