10 Steps to Debt-free Life

by admin on December 29, 2014

keysIf you have landed in the dreaded pit then remember that you can dig your way out of it gradually, just like it took time for you to get surrounded by debt. Don’t panic and take a deep breath after which you can work on the following suggestions.
1.    Firstly, admit that you have a debt problem and you need to counter it by devoting some time to the resolution of this issue each day.
2.    Make a list; first put all your debts- medical bills, electronic items, car loans etc. The amount in debt for these items goes in second column. The third column will have your smallest monthly debt payment and fourth will have percentage interest. You will now have a bird’s eye view of your monthly debt payment.
3.    You can start with little cut-backs in budget by purchasing ordinary items of the grocery shelf, taking home lunch instead of ordering, using sweaters to cut heater bill.
4.    The money you save from following above steps can be set up in an emergency fund with a target of at least $1,000 which you can keep adding to.
5.    Larger cut backs can be an absolute essential if a large debt payment is haunting you. Think of ideas like selling your new auto to buy a small or used one and even go for a smaller apartment to fight your debt with lower rent.
6.    Do not use credit cards at least for a month and stop yourself from buying needless things. Make a priority payment for utility items, mortgage and education expenditures. The semi-luxury items, gadgets, and mobile devices can be halted in this period as they increase expenditure cause of recharging, balance fill or monthly purchase.
7.    Bring out on paper all your sources of income per month and assign the money first to the emergency fund then debt payments and then bills. In the end, you can deal with your variable expenses by putting cash in separately tagged and designated envelopes.
8.    You should resist the habit of procrastinating bill payment. Go for online payment or set reminder in calendar or mobile for the due date.
9.    As soon as you get $100 in your emergency fund, start making small payments. Discretionary spending needs to be watched till all small debts are paid off. At the end of several months you will have a good sum to deposit in your emergency finance for large debts.
10.    Feel free to brain storm with your spouse and come up with creative ideas for dealing with the problem by doing overtime or asking your spouse to help you through her cooking, writing, painting talent that can sell in small ways.
11. See more tips here: https://www.lifeoncredit.ca/bad-credit-personal-loans-in-canada/

 

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