Getting burdened with debts? And looking for ways to get debt-free? Though it is easier than done, however, there are ways to become debt free. Banks provide you with the facility to apply for a personal loan to overcome certain situations.
If you are facing debt issues, be cautious before you increase the debt; but don’t get puzzled. Here are 10 ways to set you free from debt payments.
1. Don’t be in denial
The fact is you have debts and that is why you are here. Don’t panic, but recognize the fact and this will help you measure your steps. For example, if your numbers are increasing on your credit card debt but you’re not slowing down your spending. This will also increase your loan’s interest as you’re not making adequate payment. Remember that clearing-off your debts should be the primary objective and living life in denial won’t help you with that.
2. Set clear goals for yourself
You should set clear goals for expenses to live a debt free lifestyle. For example, if you have a debt, always keep that interest money aside before spending on anything. Try to submit the interest money within the deadline to avoid any penalty charges. You should also be aware of your spending habits to avoid unnecessary expenses. Remember, if you spend more than your income and then there will be more debts.
3. Don’t make impulse purchases
Before spending, make a budget, and stick to it. Try to figure out the items that you want to buy and then sort it out according to your needs. Beware of the limited time offers, don’t let the countdown push you to buy something that you don’t need.
Always keep your goals in mind as they help you to build your financial budget. It can be clearing-off your debts, mortgages, or investment for your future. But impulsive buying can prevent you from meeting your goals.
4. Avoiding eating out
Eating out is always easier than cooking your food. But it can be your biggest problem if you’re on a tight budget. So, always carry your meal and also learn to freeze foods like meat, milk, and vegetables.
Try to buy food in small quantities as they can go bad and you might end up wasting your money. Remember even dining out once or twice a week can add up to your budget. It can also reduce the chance for you to become debt free.
Why so? Let us talk “data”. Forbes has mentioned in one of its research the comparative expense chart in three different scenarios (restaurants, meal-kits, and home-cooking).
Restaurant – $20.37
Meal kit – $12.53
Home cooking – $4.31
The chart conveys the message very, ‘cook at home and save your pocket!’ clearly.
5. Don’t get swayed by targeted ads, for sale
Emails and social media can play a huge part in hampering your monthly budgets and financial goals. For example, just imagine that you’re doing great with your budget, everything is accounted for and every purchase is planned accordingly.
And then you checked your mailbox and saw 10 different emails announcing one sale after another. Similarly, in social media also you can see advertisements marketed towards you. So, you need to stay focused and avoid these things to become debt free.
6. Don’t avoid debt collectors
If you start avoiding your debt collector then they might file a lawsuit against you. This can also lead to a judgment where the collectors might garnish your wages or go after your savings.
So, it’s better not to avoid them as they can easily take legal actions against you. Make sure to let them know that you have every intention to pay-off the loan. Tell them about your financial condition and apply for a debt consolidation loan if possible. A consolidation loan helps you write off the amount at once you have been bearing for a long time. For example, after comparing the loans from different top loan providers, Instant loan helps you make a smart financial decision of taking a consolidation loan from a top loan provider and pay off all the creditors at one go, it becomes easier for you to make a monthly payment on the single loan.
7. Pay off the debt with the highest interest first
If you have several loans and credit card bills waiting to be served. Then you need to sort out your loan priority based on its interest rate. Because in the long run, the interest rate matters more than your amount.
For example, if you have a personal loan and a credit card debt. Then pay your credit card first, as they have a high-interest rate compared to other loans. This will cost you less in the long run.
8. Save for emergency fund
We have discussed earlier the importance of a monthly budget. And perhaps one of the most important aspects of your budget is savings. To survive any financial hurdles, you need to save money from your existing income.
Change your spending habits. It’s always better to purchase something or overcome an emergency while you have the cash to do so or at least you can bear 70-80% of the total amount. Instant paying off for your desired purchase keeps you away for burdening yourself with debt. And you can do so only when you have stashed away some amount regularly from your monthly earnings as an emergency fund.
9. Increase your income
In simple words, look for alternative incomes. In this digital era, you will get enough platforms to earn. For example, understand what you are good at and then commercialize it in your own way. If you are inclined towards crafts, make it the way so that a definite number of people have some kind of demand for your product. Sell it and earn a few extra bucks.
Apart from that, attending conferences, and workshops or increasing your network can also find you some new contacts and part-time job offers. You can also transit yourself into a new career by starting a side business for some extra income. If you can manage properly, then getting a loan to pay off your loans can also help you to save money.
10. Cut your coat according to your cloth
Your budget is the main tool to help you have a debt free life. Have a very clear idea about your capacity to bear the expenditure. For example, if you have gone shopping and before entering the shop you are determined to keep the budget within $500, commit to it by hook or by crook. This determination will lift you up when you will see the extra pounds you saved compromising a favorite dress to help you clear off your debts.
Being debt free is one way of life and the above-mentioned points can help you reach that goal. It’s very important to pay off your loan to avoid legal actions. Paying-off can also improve your credit score, which has great importance for future loans.