5 Tips to becoming debt free
Posted: April 27, 2018 at 12:36 pm / by Producer Eric Dye / comments (0)
Do you want to make this the year that you will finally be debt free? While we can accept the reality that most people will incur a debt one time or another in their lives, it does not have to come to a point where they can no longer enjoy the money they earn because most of it goes to paying a debt.
Take a look at the tips below so that you can start your journey to a debt-free life today.
- Put together a monthly budget – if you want to be debt-free, you need to commit it. This means that you need to set aside some unnecessary expenses and only allot money for the necessities. You need to sit down and list down where your money should go, and the list needs to only include the essentials. A chunk of your budget, which may be from Don’t think that you are depriving yourself of what you are used to having. Paying off a debt will only be for awhile, it will not be forever. There will come a time when you can shop like you used to, or travel to any country you want to.
- Have an emergency savings fund – before you commit to seriously paying your debt, make sure you have enough savings for any emergencies. Emergencies are events that you do not include in your budget, so you need to have some money set aside that you can spend. Examples of emergencies are when your car or any home appliance needs to be repaired, or perhaps someone gets sick and it cannot be covered by your medical insurance.
- Refrain from using your credit card and be smart when applying for additional loans -one of the important things you need to do while paying off a debt is to not incur new ones, because the cycle will just keep repeating and you will never be debt-free because of it. But, what if it is already necessary to take another loan? Then you should make sure that you are getting it from trusted creditors. You can inquire at brokers like First Quality Finance so they can connect you with lenders from all over the country.
- Always make sure you pay the minimum monthly payments on your loans – one of the mistakes that people do is that they think that paying any amount of money to the lender is enough. But in order for the interest rates not to pile up, you need to be paying the minimum monthly payment. That’s where your budgeting skills will come in. You need to make sure that you have enough budget for the necessary expenses like food and the like, and also that money will be set aside for your monthly debt payment.
- See if you can negotiate to have lower interest rate – if you are having a hard time meeting the monthly minimum payment, you can check with your lender if you can negotiate for a lower interest rate so that your debt will not pile up.