Living a debt free life is not a mere infatuation. Everyone wants and needs a stressful life. Being trapped in the rat race waking up to work and only to get a paycheck to pay debts. The sad reality is, it would be endless if you won’t plan to escape.
Get out as soon as you can!
So, how? Here are few but helpful tips that you can start with. Read on as this will be your first step towards a financially stable living.
Tip# 1: Make a list of all your outstanding debts.
This is an uncanny way to find out how much the total amount of the payable is. It is like a roadmap of where you are heading to. When you paint the portrait of your indebtedness. It will give a better picture of the real situation.
Thus, the visuals will make you understand which direction to take.
Remember these important elements in your debt:
- List all the names of the creditors you are liable of.
- Take note of the interest rate it is currently incurring.
- Be mindful of the remaining balance that still needs to be paid.
- And, double check the monthly payment to each lender.
It must be included in the list on when or how many years are the target of the debt to zero-out.
Tip# 2: Think on which one to be paid off first.
So, let us move on. Since you now have a better idea and a clearer picture of the totality of your debt, take a breath. Yes, let the air feel in your lungs and decide which one among the list that you want to be taken out first.
Make an approach that will make you win the battle. Take a look on which one gets the highest interest rate and aim to pay it off first. This is the best strategy because it gets a large part of your earnings.
Tip# 3: Seek for a lower interest rates solution
The high interest rated loans make your debts become even harder to pay off. Hence, negotiate with the lender to give you a lower interest rate to pay off your balance. Try these little steps to get the lessened rate.
- Check if you are eligible for a better rate based on credit.
- Sign up on com and find out what low rate balance transfer you can have. And, merge all loan balances to pay off all the high-interest rate.
- Call your lender or Credit Card Company. Negotiate an interest that is doable for you to pay off all the balance.
Once you have done this, give yourself two thumbs up! You have taken a leap towards your debt free road map.
Tip# 4: Build your emergency fund.
Photo by Pixabay on Pexels.comWhy is this important? Look at it as an emergency situation of your financial status. Being in debt is like in a situation that you need to be freed as soon as possible. Because, the longer you stay in the loop of indebtedness, the stressful it gets.
Another point of view is that if you don’t have an emergency fund. Any some unforeseen circumstances occur can put you in debt. Because you will have to solve a financial shortcoming without an emergency fund, where do you go? And the worst scenario will be, getting the bait of a high interest rated lenders.
Tip# 5: Organize and plan for a budget that records all your cash inflows and outflows.
Be committed to meet the purpose of paying off your debts. So, making a budget will help you see the ins and outs of your income. Plus, with supplementary efforts below, the goal becomes more achievable.
- Avoid temptations
- Pay credit cards or other loans more than the least amount due.
- Find ways to get extra earnings to tie both ends. Get a second job, if you can.
Tip#6: Keep a perpetual or secure employment
With all the suggestions we have mentioned above, this tip deserves a slot on its own. Because true enough that nothing will be organized and budgeted if there will be no influx of cash. Sounds sensible. Our jobs are our valuable assets, our business and employers help us with it.
In conclusion, a debt-free life is one of our ultimate goals. Since it relieves us from a stressful financial status. We don’t have to enslave ourselves from running in circles but never gets to an end. Certainly, there will come a cessation of the rat race, take an action now.