Debt Free Living
Nobody likes to owe money to anyone else. Living in debt can sometimes feel like you are being smothered to death by interest rates and payments. There are more and more issues with people finding themselves in an extreme amount of debt and not feeling like they are able to break the debt cycle.
The way that the debt system works pretty much has you owing an obscene amount of money before you even get your first job, house, or car thanks to student loans. Other people may find themselves paying off credit cards that they got on a whim and maxed out before they really thought about the consequences. Being in debt is not something that you have to live with any longer. With a little discipline and planning you can find out how to become a part of the debt free-living population.
One of the first steps to becoming debt free is to really know what you owe. Start by gathering up all your bills and debts and calculating the entire amount you will owe. Be honest with yourself because that is the only way you are going to be able to dig your way out of the debt that you have created. If you share your finances with someone else you will need to get together and figure out all of the debts you owe combined.
After you have a realistic idea of your debt it is time to start paying off those credit cards. Credit cards are a good thing when you use them responsibly, but the interest can eat you alive if you don’t watch it. Figure out which credit cards have the highest interest rates and begin paying off on those as much as possible. Nobody on earth needs more than three credit cards so decide on two or three that have low interest and high benefits. Once you have paid it off cut it up and begin only spending what you can pay back in full at the end of the month.
If you are having problems with debt it may be time to access your car situation. While a new car is great it is not something that you can’t live without. Try to find an affordable used car that you can pay cash for or have a very low payment plan. Buying a new car can be a huge waste of money, since they lose thousands of dollars during the first five miles you drive them. Think smart instead of trying to show off to the neighbors.
One of the most important steps in debt-free living is to start budgeting your income. Budgeting is an art form and people who do it well can save a ton of money. The key to budgeting is to not spend more than you make. Cutting expenses is the key to getting out of debt. You can’t live above your means and be out of debt ever. When budgeting, try cutting out unnecessary wants like excessive shopping, eating out, or other wasteful forms of entertainment. Instead of buying a new book, go get a free library card and enjoy books, movies, and CDs for free. Taking your kids to the park instead of spending money is a great way to have fun and enjoy the outdoors.
Once you have become debt-free you will have to work to stay that way. Lots of people go into debt in the face of an emergency but if you learn how to budget correctly and save your money you will not have to worry about the “what ifs” that life can throw your way. When you are retired you will be grateful for every penny that you have saved.
Guest Ranter: Mia Miah
Leave a comment
You must be logged in to post a comment.