Being debt free is something that everyone wishes they could be. When you don’t have debts, you don’t have to worry about what might happen if you lose a job, or have a loss in income. You don’t have to deal with creditors calling you all the time because the payment is late and you don’t have the stress that you have when you are in debt. How can you become debt free?
The best way to become debt free is to have a good plan. Figure out what your debts are now and come up with a plan to erase those debts. A good strategy is to figure out what debts have the highest interest rate. This will allow you to save more money each month as you are saving those interest payments. Also, if you are only paying interest on your debts, you should start paying more principal.
When you pay the principal off on your loans and other debts, it will lower the amount of interest you will have to pay. As this happens, you will see that there are fewer and fewer bills that you have to pay off. You will see that your loan balances are going down faster because you are paying off more of the actual debt as opposed to just making interest payments. This alone can lower your debt each month.
How do you come up with the money to get out of debt? You should either get another job, sell assets or refinance your loans. The trick to getting out of debt is to either cut down that debt, or to raise revenue to get rid of that debt. Whichever is the easiest plan to stick to should be what you aim for. Sometimes you are going to be able to come up with more money to pay off a debt just by getting rid of that TV package, or cutting down on your trips out for meals.
Another common sense idea is to stop spending immediately. Until you are out of debt, you should resolve to not add any more debt. Put off buying that new TV, don’t worry about getting a new car yet and just worry about eliminating your debt. It doesn’t matter if you can afford the payments or not, you should be putting a spending freeze in place if you are worried about getting out of debt.
If you are looking to get out of debt the solution is pretty simple. All you have to do is commit to freezing your current spending while raising more revenue to tackle your current debt. Either get another job, or just sell some stuff that you have around the house. Watch your interest payments and pay down the principal on your debts. This will make it easier to pay down your loans and get out of debt.