Some people are born or raised with good financial skills and discipline when it comes to spending and saving. Others do not have this inborn ability. Unfortunately, debt can be like dominoes. One bad decision often leads to another, and another, and finally a downhill spiral that can end in five figures or more of credit card debt, collections agencies, and even bankruptcy. The good news is that, even though it may feel like it, debt doesn’t have to be a life sentence.
Time and discipline are needed if someone wants to climb out from underneath debt in hopes of rebuilding a more stable financial future. It’s not impossible, but it certainly isn’t the easiest thing someone will ever do. Consider these tips on learning how to become debt free.
First things first, stop buying things you don’t need. Curb your spending to avoid further compounding your debt and digging yourself deeper into the hole. Find creative ways to reduce your spending, possibly by choosing lesser expensive products and eliminating some of the luxury or impulse items you can live without.
Start paying back your credit card statements on time and in full. If you can reduce your spending and muster the additional funds, you should be able to gradually pay down even more than your monthly balance. By paying on time and in full, you avoid piling on more debt. By paying off more than you owe each month, you will slowly start to dig your way out of debt.
Look into debt consolidation services. You may be able to consolidate debts from multiple credit cards or sources to eliminate unnecessarily high interest rates and fees. Speak with a professional before you get started to make sure your debt consolidation is legitimate and not a scam.
Speak with a financial advisor if you are comfortable doing so. Many times financial advisors can greatly reduce your debt obligations to help you get yourself out from under debt so you can live a debt-free life.
Start saving for a rainy day. You can sock away a little money each month to have in case of emergencies. Having this kind of slush fund is a great practice for individuals and families alike. Make it your goal to save enough money that could cover three to six months-worth of expenses.
Consider using a debit card and/or PayPal instead of a credit card. This way you can only spend the money you have. Debit cards are often the payment form of choice for folks who are trying to dig themselves out of debt. Using PayPal for shopping online can also help you to avoid further digging yourself into debt.
These are just a few ideas to help you live a debt-free life. Be sure to consult with your significant other to ensure you are both on the same page when it comes to finances. Together you should be able to conquer debt and live a financially successful life!