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10 Ways To Become Debt-Free Quickly

10 Ways To Become Debt-Free Quickly
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Do you want to become debt-free? In the current economy, American consumers owe $11.74 trillion in debt. While debt is common, it is very stressful and can put your whole life on hold. However, there are ways to help yourself get out of debt that are easy to keep to.

Check out 10 easy ways to become debt-free.

1. Pay Off High-Interest Debt First

Getting out of debt is hard – and even harder if your debts have high interest. Try to pay off your high interest debts first, as this makes your debt slightly cheaper in the long run; if you are paying $50 interest a month on one credit card, and $30 on another, paying off the first will make it easier to save and pay off your other debt.

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2. Look At Your Income And Expenses

Take a good look at your income and outgoings. Write down how much you make a month, and all of your outgoing expenses; rent, bills, travel, food, entertainments and little treats. You may be surprised to see how much you actually spend on things you could live without.

Doing this will show you how much money you have after your expenses to pay off debt, and it is a great way to show you what you are already spending too much on.

3. Create A Budget And Payback Strategy – And Stick To It

Once you’ve looked over your income and expenses, you can focus on creating a budget that pays off a set amount of your debt every month. For instance, if you earn $2,000 a month and you spend $1,500 on life expenses, you can pay off $500 of debt every month.

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A good way to stick to this is to pretend you earn $1,500 a month – that way it doesn’t feel like you are losing anything.

4. Get Rid Of One Luxury

Everyone enjoys a treat, whether you enjoy a daily coffee or subscriptions to your favorite magazines.

Work out one treat that you could live without, and cut it out. As you still have most of your treats, this should be easy to stick to. For instance, if you stop buying a daily coffee at work for $3, you save $15 dollars a week – and $60 a month.

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5. Consider Maximizing Your Salary

If you earn more, it will be easier for you to pay off your debt in quicker time. You could take on a second job, but if you don’t there are many other ways to earn a little extra; the amount of home owners in the United Kingdom taking on lodgers has doubled in recent years. Other options include selling on eBay, babysitting or freelancing.

6. Make More Than You Spend

Many people struggle to save, and can end up spending more than they own. Recent studies reveal that in 2010, 73% of Americans spent less than they earned, but by 2012 that number had fallen to 66%. Many people struggle with this problem, so make sure you know every month that you made more money than you spent.

7. Improve Your Credit Score

Improving your credit score is a great way to ease your debt, and work on paying off other debts. As your credits score improves, the interest rates you pay become lower. For instance, your interest monthly payments could sink by $20, saving you $240 a year. You can improve your credit score by paying your bills on time and not opening other credit accounts.

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8. Anything You Don’t Spend, Save

If you have money left over at the month, don’t treat yourself to a new handbag – treat yourself by reducing your debt a little further. Thinking this way will make you debt-free faster, getting you back to a financial situation you are happy with.

9. Be Disciplined

Try to avoid borrowing any more money or taking on any more debts until you have repaid what you already owe. This can often cause people to become disheartened, which could result in them losing their motivation and not keeping up to their re-payments.

Stick to your budget, and think about if you actually need to get in more debt – what is the money for? Is it essential?

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10. Stop Thinking About It

Don’t spend every day obsessing over your repayment plans and budget – this can stress you out and make you feel like you are not in control of your debt. However once you have a payment plan in place, you can stop thinking about it and start just paying it. You are chipping away at your debt every day, so relax and try not to think about it. Good luck!

Featured photo credit: Imcreator.com via imcreator.com

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Amy Johnson

Amy is a writer who blogs about relationships and lifestyle advice.

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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There
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Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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