Being debt-free is a great financial goal that’s within reach for all of us. But reaching that goal may not be easy. You’ll have to adapt and change your behaviors to support your goal. Here are some tips to help you get started.
· Wait to Buy: First and foremost, it’s important to control impulse spending. If you think you need something, sleep on it. You may find a better price if you do your research, or you may decide you don’t need that item after all.
· Pay Attention to Details: You won’t notice that recurring fee on your credit card for the gym you’ve stopped using if you’re not checking your statement regularly. People without debt monitor their personal finances closely. They are less likely to waste money by forgetting about payment due dates or overdraft fees.
· Pay as You Go: Don’t let your debt pile up over simple expenses you can afford to pay when you make purchases. Charging your coffee every day can add up very quickly when your credit card bill arrives at the end of the month. Instead, use cash or your debit card for everyday expenses.
· Don’t Carry a Balance: Avoid paying interest and accumulating debt. Instead, pay your balance in full at the end of each month. This will help control your debt and avoid unnecessary spending.
· Automate Your Savings: Take the responsibility of saving off your shoulders and just set it up to happen automatically. You can have part of your paycheck direct deposited into your savings, or you can set up an automatic transfer on payday. Either way, it’s a great way to stay on track.
· Pretend to Make Less: Even if you are already deep in debt, you can start to improve your situation by immediately changing the way you look at your money. Imagine you make 10% or even 25% less than you do. Make a budget using that math. It may be impossible at first but start making cuts to your spending. Debt-free people live on less than they make. This allows them to put money aside for buying a house, retirement and an emergency savings fund that will give you more options in the future.
· Set Some Goals: You’ll find it easier to put aside money if you have a strong sense of what it is going towards. This works for when you are saving up for those shoes, planning a vacation or thinking about retirement. Debt-free people set specific goals, so they know what they are striving for. This helps you stay on track.
· Don’t Be Afraid to Ask: Ask for help. Ask for lower interest rates. Ask for forgiveness for making one late payment. Ask if you can lower your cable, cell phone or internet bill. Debt-free people take control of their finances and they aren’t meek about it. If you know someone who has met a financial milestone you admire (saved $1 million for retirement, bought a car in cash, paid off their credit cards, etc.), don’t be afraid to ask how they did it.
The only way to get out of debt is to, get out of debt! Once you decide you want to live a debt-free life, all you have to do is start. It takes small, intentional choices (or baby steps) in the right direction to get you to where you want to be. But you don’t have to do it alone, we are always here to help you along the way.