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 to take the initiative of being debt free
The financial advisors say that the main reason why people are in debt is due to the fact that they want to be in debt.
To become debt free, the first thing you need to do is make a decision, deep within yourself, that you want to overcome your debt problems.
However, once you decide that, be prepared to face a lot of criticism. But, you’ll be successful only if you stick to the decisions you’ve made, and don’t pay heed to what others say.
Whatever be it, you need to get out of debt, because debt can lead to marital problems, health issues, and invite several other problems in your life.
You can motivate yourself by thinking - What happens when you’re debt free? Have you thought of it?
Apart from improving your financial situation, once you’re out of debt, your confidence level increases dramatically. Money gives power.
When you know you don’t owe anything and you have a decent amount in your savings account, you know you have the monetary power, which makes you confident in life.
So, take the initiative! Be debt free and enjoy life!
How your life can be better when you are free from debt
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 dues 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, 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 back your outstanding balances. Doing so, you can secure your financial future, too.
How to become debt free - 10 Simple steps to follow
- You've borrowed recklessly
- You've missed out your payments
- You didn't save money
- You've ignored your creditors
- You didn't have any control over your expenditure
A professional can help you choose the right option. If your desire is to lower the interest rate on your credit cards, then enroll in a consolidation program to pay back your creditors through affordable monthly payments. However, if you wish to bring down the outstanding balance, then you can go for the settlement program. Choose the right debt free plan to live life without debt after a specific period. But, you'll have to stay motivated and make the required payments on time.
In case of a 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.
If you opt for settlement, then the professional will request your creditors to cut down your total payable amount. He/she will request the creditors to settle debt through a lump sum payment.
Try to do extra work to earn more and get debt free. 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 dues.
Being frugal always helps when you want to live debt free now and forever. But you shouldn’t be selfish when you’re practicing to live debt free. So, knowing how to draw the line between being cheap and frugal is important.
In addition to this, check out five secret steps towards a debt free life.
How to be debt free: 8 Tips which you need to pay attention to
Life is better when you have no dues to pay off. These tips can help you get rid of your debts.
Habits of people who never worry about debt
These are the habits of people who prefer living with no 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 repay dues, 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 living 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 borrowing money, 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 comfortably when you're living with 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.
Your job doesn’t end even after paying back debts as you need to learn how to stay debt free throughout your life and secure your financial future. Check out how to manage finances after being debt free.