Living a debt free life is possible – How to achieve it
A debt-free lifestyle requires less effort than what you actually think. All you need to do is select the right way to pay back your creditors. Once you start living a life without an escalating credit card balance or frequent calls from collection agencies, you can get back the peace of mind.
How your life can be better when you have no debt to pay off
Before you know the steps and tips about how to get debt free, first discuss in what way life is better when you have no debt to pay off.
You can live stress-free - Why have more stress when we have to deal with so many tensions in our life? When you don't have to worry about debt, your life becomes stress-free too. Even if you meet with an emergency financial situation, if you have an emergency fund and no debt, money can be used to sustain without giving a major blow to your financial situation.
Better control over your life - When you don’t have to arrange money for the interest payments, you have more cash to have a better control over your life. Instead of paying for your past expenses, you have money to use for your present and future needs. Moreover, you can also invest for a better return in the future.
You can plan a better future - A debt-free lifestyle helps you plan your future in a better way. When you make just the minimum payments, the payable amount gets piled up and creates an avalanche, thus making it more difficult day by day. But, you can build a positive avalanche by paying off your debts. Doing so, you can secure your financial future, too.
How to become debt free - 10 Simple steps to follow
It is difficult to live debt free without any strong resolution. Promise yourself that you'll be living debt free after a specific period of time. Once you've set up a goal, start taking steps to achieve it.
It is high time you know how much you owe to your creditors. Go through the unopened and opened bills. Make a list of your debts - from big to small. Calculate your total debt amount. Don't forget to note down your net monthly income. This will help you understand where you stand financially.
You have how much to pay your creditors. Now, you have to decide on the payment strategy. Ask yourself if you can negotiate with your creditors and pay them back on your own. You can check out the DIY section for any assistance. However, if you're not confident about handling your creditors, then it's better to seek professional help.
A professional can tell you how to live a life without debt problems. He/she has the knowledge and the expertise to help you get out of debt. Discuss your financial situation with the professional. Don't hide any fact or else the professional won't be able to guide you properly. A professional can help you choose the right debt relief option. If your desire is to lower the interest rate on your credit cards, then enroll in a debt consolidation program to pay back your creditors through affordable monthly payments. However, if you wish to bring down the outstanding balance, then go for the debt settlement program.
Attend the free counseling session offered by the debt relief company. This is the time when the professional will ask various types of questions to you. Answer each question correctly. Mention the name of your creditors and the amount you owe to them. Make sure you inform the professional about your interest rate and minimum monthly payment amount so that he/she can make the best decision.
In case of a debt consolidation program, the professional will also help you plan a budget. You'll have to adjust your lifestyle to fit into that budget. The professional would like to know the amount you can save through budgeting.
In a consolidation program, the professional will explain to your creditors why you can't pay the high-interest rates anymore. The professional, on behalf of the debt relief organization, would request the creditors to allow you to pay back your dues through affordable monthly installments. If you opt for debt settlement, then the professional will request your creditors to cut down your total debt amount. He/she will request the creditors to settle debt through a lump sum payment.
Start making payments on the basis of the debt relief option you've chosen. If you're working with a consolidation company, then send single monthly payments to pay back your creditors within a period of 2-4 years. On the other hand, if you decide to pay off your debts through a settlement company, then start saving money in a trust account. Once you have saved a lump sum amount, the professional will contact your creditors and hand over the money.
You can't afford to lead a luxurious life when creditors are knocking at your door for payments. You have to get accustomed to a modest life. Buy a cheaper brand of items to save money. Resist your temptation of dining at expensive restaurants. Rent DVDs to watch your favorite movies. The idea is to save as much as you can.
Try to do extra work to earn more. You can work for some extra hours at your office to make money. Otherwise, you can also do side jobs in your free time. You can work from your home to make some serious money and pay off your debt.
Keep your credit cards at a safe place. Use cash to make your purchases instead of whipping your cards. Reject the new credit card offers, no matter how much tempting they are. Avoid borrowing from the payday loan lenders. If you're a student, apply for scholarships so as to minimize the chances of taking out an educational loan.
How to be debt free: 8 Tips which you need to pay attention to
Life is better when you have no debt to pay off. These tips can help you get rid of your debts.
Habits of people who never worry about debt
These are habits of people who prefer not to incur debt. You can consider these as useful debt-free living tips and check out how many of these habits you follow.
1) Prioritizing on debt free living - Every day, these people remind themselves that they have to be careful about not to let the money go down the wind.
2) Creating a wide gap between earning and expenditure - If you’re wondering how to become debt free, then the main thing is to create as much gap as possible between your income and expenditure.
3) Valuing the time-money relationship - You need to segregate between the chores that you can do on your own and which you need to outsource. People who don’t have debt know how to value time to improve financial life.
4) Considering lower income than actual earning - The best way to become debt free is to consider your income much less than what you earn. People, who want to stay away from debt, plan a realistic budget with 10%-50% less than what they earn. They save and invest the remaining amount for a better financial future.
5) Not paying heed to peer pressure - Always there will be some friends asking to spend on your non-priority things. But, you need to prioritize your expenses and not pay heed to what others are saying.
6) Planning for the unforeseen circumstances - People with no debt have funds available for unexpected expenses. Doing so, they don’t fall into debt as they have the cash reserve to meet those expenses.
7) Having the patience to save money for a big-ticket item - Ultimately life is better if one can patiently wait and save for a big ticket item instead of using a credit card. It is difficult to wait for long when you can easily swipe your cards, but it’s beneficial in the long run if you save the amount and then purchase the item.
8) Visualizing the financial situation 5-10 years ahead - Wise people make the choices today in alignment with long-term success to benefit in the future. This helps to overcome the hurdles of the present.
9) Not relying on one income - People, who don’t encourage debt, prefer multiple sources of income instead of relying on only one. They want to value their leisure time to build a secure financial future.
10) Scheduling money meetings - Periodical money meetings help you analyze your financial situation and decide necessary steps you need to take. People who want to stay away from debt usually arrange a weekly financial meeting with their partner.
It is not easy to live a comfortable life when you're in debt. However, don't get too much stressed to get back on the right financial path. Relax and entertain yourself by reading a good book or watching a TV show. Your mind will work fast when you are properly rested. You'll be able to manage debt in a better way.