How to Remove Debt from your Life

People all over the world are struggling to survive and in the process they are making life harder for themselves by getting in to debt to pay for not only their needs like bills, but also for unnecessary items like simple pleasures, clothes, going out and fine dining. The truth is that most people would like to be out of debt and live a life that’s free of overdue credit cards and personal loans.

Whether you have a minimum wage job or a six figure income you are at risk of getting into debt, but you also have the ability to get out of it too. They say that money attracts money, well it seems that debt attracts debt. So the best thing to do is get rid of debt as fast as possible without getting into any more. In order to get yourself on the right track and remove debt from your life, for life, there are a few things you can do.

Figure out how much you owe

The key is knowing what you owe, where and how much, as well as the interest rate on each one. If you’re behind on any payments than you are going to have to make them up immediately before downsizing your other debts. Once you have the details of your debt you can begin to reduce it and finally eliminate it from your life.

Create a friendly budget

The dreaded budget is important, without one you aren’t likely to know where your money is going. Get out a piece of paper or open a new word document and write down your income and your expenses, including both your fixed and variable. If you’re not certain what you spend money on, get out your bills for the past three months and work out an average. When it comes to your grocery shop, give a rough estimate by looking at the week’s receipts. What’s left over should go towards your debt elimination.

Cut down your costs

Some costs can be easily cut, others somewhat harder. Find ways in your variable expenses to cut spending. Shop less often, stop buying processed foods and learn to cook healthy and cheap meals. With the right recipe you can cook a healthy meal for four for under $10. You don’t need dessert everyday, nor do you need to buy all those sweets and soft drinks. Every dollar you saved on your expenses, is a dollar that can be used to reduce your debt and save you even more in interest.

Tackle debt head on

Stop thinking about how you need a new bed, you can sleep on the mattress or the floor for a while, or that your children really want that new toy when the old one is fine. Set priorities and make debt reduction a family affair. Everyone should understand that you’re trying to get rid of debt so that you and your family is better off for the long run. A year of scrimping and saving is a life time of fun and financial freedom. The short sacrifice is worth it.

Avoid new debt

Consolidating is an option, and if it’s going to save you thousands in interest over the long term it might be a good idea, however it also increases your risk of getting into more debt once the cards are paid off. So if you’re consolidating, make sure you cut up your credit cards and don’t take out any new personal loans no matter how tempting or attractive the offer. It’ll only suffocate you more and prevent you from removing debt out of your life.

Removing debt from your life is simple. It’s taking one step at a time and making the right decisions along the way. Debt leads to disaster, and life is a lot easier and more fun without it.