How to Become Debt Free For Life

Today, millions of people are experiencing debt problems for a variety of reasons. The mental anguish caused by out-of-control finances can be devastating, whether it is due to overspending, the loss of a job, or the current housing crisis. The good news is that with unwavering commitment, anyone can take the following steps to eliminate debt and remain debt free for life.

The first step on the road from debt to financial freedom is by far the most difficult. At this stage of the game, it does not matter how you got into debt or how deep you are in debt. It will be painful, but you need to:

• Cut your expenses by finding the best ways to save money and learning how to live frugally.
• Increase your cash flow by looking for sources of supplemental income.
• Follow the specific steps in this article about how to eliminate debt.

Getting out of debt quickly may be easier than you think. By paying even a little extra on your debt each month, you can reduce your time in debt by months and maybe even years. This debt snowball calculator shows you how easy it can be.

It would seem that once a person gets out of debt, he or she would do everything possible not to return to the same situation again. Unfortunately, that is not always the case. It can be similar to some people who work so hard to lose a significant amount of weight only to let the pounds creep back on later. They know how to take it off but not how to keep it off.

How can you prevent the “weight” of debt from creeping back?

Living debt free requires an absolute focus on not spending more than you make. Personal budget planning is the best way to maintain that focus. With a budget, you know exactly where each dollar is coming from and whether it will be spent or saved. It will also help to prevent you from impulsive spending.

Also important is to distinguish between need vs. want. Even if you have the money to pay for things that you want but don’t need, you may find that they cost you more later on. For instance, you may be able to afford to buy an additional car. But are you prepared for all the extra costs that go with it, such as gas, regular maintenance, insurance costs, repairs, etc.?

Even by doing all the “right” things, like following a budget, living frugally, and saving money, a person can still fall into debt. How? Because of a lack of planning.

To really debt proof your life, take some time to think about all the worse things that could happen. They probably never will happen, but you still must be prepared for them. Disability, loss of job, death, unusual expenses are all examples of things that could cause a family to go into debt. Determine ways you can handle these situations through insurance, emergency funds, or other means.

Take control of your financial situation today. If you currently have debt, follow sound, debt free financial advice to pay it off. If not, take steps to become debt free for life.

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