Talk to a debt counselor toll free:800-300-9550
Our Clients Rate Us Excellent
Based on 3234 reviewsTrustPilot Reviews
People in debt are not just after paying off their debts, they want a successful debt freedom. But what does that mean?
Being debt free is one thing. Unfortunately, if you are not careful, there is a possibility that it will be short lived. You need to go through the right process in order to really learn your lesson. While we all want to get out of debt fast, you need to take it as slow as you can in order to drive the lesson firmly in your head. Just like someone who lost weight needs to continue regulating their meals, you also need to be vigilant about your monetary transactions. That is the only way that you can be assured that you will make your debt freedom last forever.
Steps to a life free from credit obligations
Anyone in debt will tell you that the road towards debt freedom is not easy. While the concepts are simple, they are not without hardships. You will be tempted left and right, you will be asked to restrict your lifestyle and you will have to go through some sacrifices that are necessary to achieve freedom from credit.
There are many ways to become debt free and if you want to be successful in your efforts, you have to accomplish at least the following tasks.
Define the mistake that led you in debt. The first step is vital to maintain debt freedom - it is knowing what caused you to be in debt in the first place. While people usually blame bad spending habits, that is not the only cause for debt. Sometimes, people pay their dues and make smart spending choices but since they lack in savings, they got themselves in debt when an emergency struck.
Find out how much you owe. When you have an idea about the cause of your debt, only then can you find out the gravity of the problem. Know how much you owe and also, determine if you can stop acquiring debt. In some cases, debt is brought about by an illness and if you haven’t stopped incurring debt because of an on-going medical treatment, that will affect your choice of debt solution.
Calculate how much you can afford to pay. Another factor that determines the debt relief program that you will use is your ability to pay off the debt on a monthly basis. If you are able to pay your debts without a problem, debt consolidation will suffice. But if you need a debt reduction, you will require debt settlement.
Decide on the debt relief program that you will use. Based on the information that you have determined so far, you should have an idea regarding the type of program that will best suit your financial condition. Choose depending on your ability to pay and what you are willing to sacrifice. Sometimes, you may be able to afford the payment but you cannot stand the long wait or the credit damage that the program will require from you.
Follow the payment schedule. Once you have made your choice, you have to ensure that you will stick to it and follow it to the end. Given the circumstances, you do not want to to waste your time, effort and the little money that you have set aside for your debt payments.
Learn the habits that will correct the mistake you made. Since you have defined the mistake that got you in debt, you should find out the habits that will correct that. If it is lack of an emergency fund, you should start building that up. If it is overspending, you need to start practicing smart spending habits.
Follow all of these steps and you should have the things that you will need to keep yourself out of debt.
Key to make your debt free life last
The key to make your new found debt free life last is to practice proper financial management. In the end, you will realize that it is the one thing where you failed at. Debt is caused by several mistakes that you made in the past. You want to make sure that you can eliminate the wrong financial decisions - if not limit them.
Here are some tips that will help you practice financial management skills that will keep you from committing the mistakes of the past.
Live below your means. You have to make sure that you start living not just within your means, but below your means. By doing the latter, you will free up some money to be spent on either debt payments or your savings.
Create a budget. The only way that you can do that is when you use a budget to help monitor your financial activities. Know your income and list the expenses that you will spend with it.
Make smarter spending choices. You have to understand that even if you can afford to buy something, it does not mean you have to buy it. Sometimes, it is better to just put it in your savings.
Grow your savings. In the end, your savings will help you out of the unexpected expenses that will come your way. That will keep you from borrowing money just to help yourself out of those tight spots.
Equip yourself with the knowledge that will influence your decision making. There are many online resource sites that can give you the education that you need. You have MyMoney.gov that is a government sponsored website that holds relevant personal finance information.
Here is a video that we created for you to help you understand the emotional process that you have to go through in order to solidify the debt freedom that you want to achieve.