Though the thought of being debt free is intriguing to many individuals, the ability to actually do so is not for the faint at heart. It takes determination, commitment and development of healthy routines. Below are five common habits that can help you live debt free.
1. Pay Outstanding Debt
This will most likely not be a quick process, however attacking it with a plan can help you to pay it off sooner than traditional predictions. As much as you can, try to pay more than the monthly minimum. It can also help to prioritize your debts from greatest to least. Then decide to start at the bottom, pay off each small debt, and add that amount to the larger payments, or eliminate the largest debt first and then use those larger payments to pay off the smaller debts quickly.
There is a common saying that, “If you fail to plan, you plan to fail.” It rings true in many circumstances, including with finances. Managing your money is literally a numbers game. Therefore, it is important to know not only the numbers you have (your income) but also the numbers you need (your bills) and the numbers you want (your savings). Create some form of diagram to map out where you currently are financially, where you want to be, and a plan for how you will get there. Keep your budget were you will regularly see it as a reminder.
3. Seek and Utilize Deals
Discounts and coupons are your friends. You might be surprised at how the ten and twenty-five cent savings can add up. If you know that you use a large amount of a product, compare the costs of buying in bulk to buying individually. If you want to go out, search one of the many discount sites to see if you can find a two-for-one deal or discounted activity. “Thrifting” is a great way to find designer items at very reasonable prices. These and other options can save you hundreds, even thousands, within the course of a year.
4. Borrow or Barter
As you are working to reduce your debt you want to make sure that you make as little new debt as possible. This can boil down to the smallest things, such as buying books. Small changes in these practices, such as borrowing a book from the library or trading in an old book for credit towards a new one can really make a difference.
Even the most frugal spenders can find themselves in a bind when they get hit with unexpected large expenses. Having a savings or an emergency fund can help to protect you against this. Once you have begun to pay down your debts or as you save on different activities that you have budgeted for, start to put away some of those funds in a secure account. As you build your savings, you may consider some wealth management in San Francisco to build a lasting investment. Adopting these habits may not be easy, however they can lead to great rewards. For more tips and aids in achieving your goals, consult with a professional. Image courtesy of anankkml. portfolio at FreeDigitalPhotos.net