How to Live Debt-Free Life

Nowadays, every second person is stuck in some sort of debt because of various things, like a 20-year house loan or credit cards defaults etc. Credit cards and other financing options are viable whenever the economy is strong and people are able to say with surety that they can continue making payments, but not in today’s world.

The economic crisis has forced even some of the richest people to reconsider their spending habits and begin living frugally. Living a debt-free life has many advantages and through proper knowledge, you can also live one.

Instructions

  • 1

    Rethink Lifestyle

    Spending money on useless things like the latest electronic gadgets will always have you reaching deep into your pockets and pulling out that high interest rate credit card in the end.

    It is not necessary that you get a new smartphone every few months or need that latest 50 inch LED TV. You need to come out of the material world to experience a debt-free life. Shop for only the necessary and buy something big only when you have enough cash on hand.

  • 2

    Spending Within Your Means

    There should be no reason for you to spend beyond your means. If you are making $1000 a month for example, you should definitely not be spending more than that, but instead, save some of it.

    An easy way to do this is note down your income and your monthly expenses. Now prioritize which ones are necessary and which ones can be cut out.

  • 3

    Stop Using Plastic

    Plastic is most probably the biggest reason behind debt traps. Credit cards may seem like an easy way to buy something you want, but remember, in most cases you have to pay back that amount and some more on top of it.  The best bet is to save up some money and use cash.

    Keeping cash may seem like a hassle, but it is a great way of keeping a record of how much money you are spending on a daily and monthly basis.

    The trick with credit cards is that your mind doesn't really bother much when you are using it, as it does not see any cash. However, once you get a bill, and a deadline, at the end of the month, panic sets in.

Leave a Reply

Your email address will not be published. Required fields are marked *


eight − 3 =