Having a lot of debts and not knowing how to pay them can be depressing. As a result of the financial mistakes you made in the past, you have found yourself in a lot of debt. Well, you shouldn’t give up now. The truth is that humans are bound to make mistakes, so don’t feel too bad. Erase those suicidal thoughts from your mind and cheer up. Even some of the famous people you know today, at some point in their lives, have made mistakes. But how they were able to stand out was that they never gave up. Instead, they worked hard to correct those mistakes. Mistakes, if properly corrected on time, can turn out to be a blessing. I will be sharing my thoughts about how to become debt-free as well as stay debt-free.
First and foremost, you need to take note of your income and your expenses. Are your expenses more than your income? Yes, you need to “up your game” and find a way to make sure your income is greater than your expenses. You should ask for a raise or get a new job that pays you better. Similarly, you should reduce your expenses. Quit going out to eat and start learning how to cook in your home.
Take note of your expensive hobbies and stop spending on them. While you are trying to get out of debt, you should find cheap hobbies to replace your expensive hobbies. Find hobbies that can keep you focused as well as motivate you. For example, you can start by visiting libraries to read free books.
If you have kids who are always demanding special treats, make them understand that you are now on a budget and there are things you cannot afford. Let your family know the challenges you are facing. They would be willing to support you in any way they could, and that would reduce the pressure on you.
Make plans and budgets before spending. To reduce the amount of money you spend while shopping, you should make a list of your needs and stick to them. Avoid impulse buying Also, you should start making use of coupons to save more money. Cut out those coupons if you have any and hand them over to the cashier to get discounts or free packs.
Furthermore, you need to get rid of some of your addictions and bad habits. Are you a gambler? If yes, you need to stop wasting your time and money placing bets. Gambling is not a source of income. You would only keep losing money and end up with nothing. Gambling will continue milking you dry and will lead you to bankruptcy. Are you a drug addict? If so, you should visit a therapist to get rid of your drug addiction. Take note of those addictions that take the larger percentage of your salary/income. Once you can figure them out, you should avoid them to save money.
When you are trying to pay off your debts, it’s either you pay off the small debts first or go for the ones with high-interest rates. Stop paying your debts randomly. Save yourself from financial traps by paying off your loans with high-interest rates one after the other. But if you don’t have enough money to pay off loans with high-interest rates, you can pay off your small loans.
Likewise, since expenses are unlimited, saving money with the view of paying off all your loans or debt at once is not the right approach to get out of debt. Start paying immediately when you get the money. Unexpected expenses or needs might come up at any time, and you might be tempted to spend your savings.
In addition, to become debt-free faster, find a side hustle to add to your professional job. You need to increase your income. Find a side hustle or a part-time job that you can easily combine with your professional job without quitting it. It might be hard to combine working part-time with your professional job but understand that you have to do this to get out of your debt. Be ready to sacrifice your leisure time and sleep until you fully pay off your debts.
Aside from matters related to life and death, money should only be borrowed to create further wealth. Many people are fond of borrowing money to sponsor irrelevant things. You should avoid borrowing money to spend on liabilities. Also, while trying to pay back loans, don’t take out any other loans. Avoid paying loans with loans. Beware of financial traps.
Once you have been able to pay off all your debts, you should start saving every penny that is worth saving. Avoid spending on irrelevant things. Start saving against unexpected expenses, financial loss, and a better future for yourself and your family.
In conclusion, it requires proper planning and discipline to be debt-free as well as reshaping your financial lifestyle. Make plans and work towards it. I believe you can be debt-free. Also, to stay debt-free, start learning from the financial mistakes others around you have made as well as your own. Avoid financial mistakes that could cost you a lot.