Are you straining from the weight of debt? From the time we graduate college with a degree, and a student loan, we are always acquiring debt to fund our lifestyles.
A car lease, a mortgage payment, credit cards
If you think that your debt load may be getting out of hand, try out these seven tips to help you get back in control of your finances and become debt-free:
How to Be Debt-Free
#1 Always Pay Yourself Before Anyone Else.
Before you divide up your paycheck, to settle your monthly credit accounts, keep aside 10% of your income for yourself.
Too many people get lost in need to pay off their creditors first. It is important to instill the value of savings above paying a debt. Therefore, make sure you pay yourself before you pay anyone else.
#2 Consolidate Debts.
Many people wonder how can I consolidate my debt and drop my monthly payments to creditors.
Debt consolidation takes all your existing credit facilities and combines them into one financial instrument that covers everything.
If you are getting behind on your payments, you can speak to a lender about a consolidation loan that refinances your loan and makes your payments cheaper, saving you money at the end of the month.
#3 Make Sure You Pay the Minimum.
Whatever you do, never skip a payment to a creditor if you want to become debt-free.
If you do, they will register you
You will need your credit score to access new forms of credit when all your debt is paid off, so make sure that you at least make the minimum payment on your accounts every month.
#4 Pay the Highest Interest First.
Go through your accounts and take note of which creditors charge you the highest interest rates.
Make it a priority to pay off these creditors first. By doing this, you reduce the money you have to spend on interest and this is as good as saving.
Credit cards, clothing accounts and other niche forms of finance have the most expensive rates, so make sure you settle those accounts first.
#5 Budget Your Spending and Make Cuts.
Do you use a budget to control your finances? If you don’t, then it’s time to get started.
Make a note of your assets and liabilities, as well as your income and expenses. Plan your expenses for the month and make sure that you stick to your budget.
Being prudent with your finances shows responsibility and if you are responsible with money, then the universe will give you more to be responsible with and build your personal wealth.
#6 Downsize Where You Can.
What are you spending money on that serves you no purpose? Could you save on cable tv, or on your cell phone package?
Where are you over spending? Check your food budget and your car mileage, are you driving too much and could be saving on gas?
#7 Increase Your Earning Potential.
The easiest way to eliminate your credit issues and be debt-free is to earn more money.
Get a second job, or start a business in your spare time to increase your cash flow.
The Final Thought
The burden of debt can become uncomfortable when it is no longer manageable. Follow these seven steps and see what you can do to reduce your debt as quickly as possible.
We all need credit in our lives. It’s part of modern society and one of the benefits of the monetary system.
However, be responsible with your lending and never take on debt that you do not intend to repay.