Six Simple Steps to Live Debt Free
No matter how busy you are and what your financial situation is, you can get your financial life under control and live debt free.
As of right now Americans are carrying $683 billion in revolving card debt. More than 30 million Americans are affected by bad credit and one in 100 America families is affected by a bankruptcy. According to a recent Cambridge Consumer Index report, 47% of people who paid less than their full balance paid only the minimum that was required.
Many people are not bothered by the fact that they are in dept up to their eyeballs. Instead of paying off their balances, they get more credit (because everyone else is doing it) and get sucked in to it deeper and deeper.
Step 1. The first simple step to becoming debt free is to change the debt mentality, which the majority of Americans have. Our consumption mentality makes us buy things which we don’t really need. People buy things because they are driven by emotions and desires instead of their logic. Buying things can make you feel good for a short period of time, but in the long run it will lead you to frustration, conflict and unrest which deep debt can cause.
Step 2. The second step is to avoid small debt. With a few exceptions (such as buying a car) you should wait to buy something until you have money to do so. Buying new furniture may seem like a good idea, especially if it is on sale, but most people forget that unless they pay for it right away, they will end up paying interest, which may double the price of the actual furniture. If people did their math and took time to count how much more they would end up paying with interest, the sale would not seem so hot after all.
Step 3. Most Americans are optimists and they don’t like to think that something bad might happen to them. But unfortunately crap happens. People lose their jobs or get sick and that’s when the real crisis occurs. Paying the debt off is hard enough when you have a job and you are healthy, but it becomes impossible to do it when you don’t have the income and your bills are getting higher every month.
While you are trying not to get into more debt, try to eliminate the debt that you already have. Make a list of everything that you owe and prioritize your payments. It is a good idea to start paying off the card with the highest interest rate.
Step 4. Use your debit cards. When you are paying your debt off, try not to use credit cards unless it is absolutely necessary. After you are done paying one card, close the account. Credit cards may be convenient, but they are the ones who cause us to be in debt.
Step 5. Track all of your purchases. Track every single penny that comes in and goes out. If you have any extra, don’t go shopping for something you don’t really need. Put the extra money towards your debt.
Step 6. Get debt help. Some people are embarrassed to admit that they are in bad financial shape, so they don’t seek a professional help until their situation is hopeless.
Don’t be one of these people. The sooner you ask for help, the sooner you can start to live debt free.
