Keeping yourself out of Debt

Knowing where and how to invest your money ensures a certain amount of financial freedom. But real freedom comes with owing no one, and in this modern age, that is hardly possible. The closest anyone comes to absolute financial freedom is not being in debt.

Financial freedom means your income is yours. It won’t be for long since you’ll be paying bills and buying food, fuel for your car, but you have the option to spend your money for what you want, not what   your creditors demand. Total financial freedom in today’s world, as an example, is living in a house that you totally own, growing your own food, solar heating your home without cost or somehow generating your own energy.

When you are in debt, even trying to get out of debt is costly. There’s numerous ways lenders who make money off people in debt will offer to help you pay off your debt; they do it for a fee. At first thought that doesn’t make sense. If you are already in debt up to your eyeballs as one advertisement actor puts it, then why pay others to get you out of debt? That unreasonable situation may be necessary if you’re being hounded beyond reason. But for sure that will be one expensive lesson in frugality.

What steps then do you take to remain financially free? You carefully plan how to spend your money by budgeting; you buy only what you need; tone down lavish living; use your time as well as your money wisely; get your priorities in order; stop following the crowd. These are only a few ways you can remain financially free, but they are at least a first step to understanding the real value of money. Money is to help you live a better and more informed and caring life.

Truth is financial freedom is more of a come hither word than a reality. It is used in business circles in various ways. It snags your attention because almost everyone is in debt. With the beginning of installment buying people started getting into debt. At first and for a few years afterward, this was manageable.

When credit cards became fashionable and dreamers wanted houses of their own, then bigger houses, and trendy clothes and the latest appliance and kitchen gadgets, they went into debt for them.

The situation has now reversed. The whole world is in debt and the future looks bleak. Now, to be debt free is the dream and the furniture, the house, the clothes and the cars one went into debt to buy is shabby, worn out and of no use. What led to that impossible situation in the first place? Following the crowd and throwing caution to the wind landed the world into debtor’s prison.  

Steps to take to work toward financial freedom

Live frugally.

Don’t be miserly, but know where every penny goes. Learn and understand the meaning of life that is all around you that costs nothing. Instead of expensive vacations that leave you exhausted and penniless and far in debt, slow down and smell the roses in your own back yard, or better still, at the neighborhood park.

Pay something each month on all your debts

Keep on the good side of those you owe. Let them know you are honorable and are doing the best you can to pay them. If you are truly having a hard time meeting all your debts, ask them for lesser payments. Honorable dealers will be accommodating to those whom they know are having a hard time.

Decide to live simply.

Sell your superfluous items and put the cash toward your debts, don’t allow them to take up valuable space when they’re doing nothing but collecting dust. If you happen to be in a house too large and too costly to upkeep, sell it and move into affordable housing. Use the money to pay off your debts.

Consolidate your debts if they’re unmanageable

If in debt extensively, move all to one consolidator and decide to stop buying on credit. This will really mean you will have to live frugally. But the more money you save by your budgeting and your simpler life style, the faster you will be able to see that freedom from debt light at the end of the tunnel. Be careful, however, and make sure your choice of a debt consolidator is a reputable one and is one you can communicate with. Get all claims in writing.

If all else fails take a bankruptcy

Bankruptcy is a last resort. But if you have nothing left and no means of recouping losses you will have no other choices. This is not the end of the world but it will limit your life style considerably. Your credit rating will be at zero. But you will be able to feed your family and can start all over with less grandiose ideas on the world of finance.