How to Ensure a Debt Free Future
There seems to be a spiking trend I’ve seen lately. There are tons of people looking for ways to become debt free. Not only debt free from credit cards but even down to their mortgage payments. I was just watching on the news the other day about a huge interest in tiny houses. I’m talking 190 square feet in total build on a trailer bed with solar panels and water retaining systems. Some people are going great lengths to be totally debt free.
Few things in life stress you out worse than debt. Owing money to someone or accumulating credit related debt is also incredibly common. The vast majority of people owe something to someone throughout their lives…at least for a time. There are, however, people that live their lives totally debt free. They are able to pay off any credit immediately on the due date and rarely pay late charges. They have no outstanding debt whatsoever…but how?
Here are some tips to ensure you can have a debt free future as well:
Be highly selective about credit offers
Credit offers are unavoidable and they can be extremely tempting. The vast majority of young people see a credit offer extended to them for the first time and dive right in. This can lead to a lifetime of spending and bad habits, as well as a sky high interest rate. Interest is basically wasted cash. Most young people can’t afford that type of problem and end up in debt for the rest of their life. Instead, spend time carefully going over all of your options. Only take the best credit offers that will help you build a history. Pay them back immediately at the end of the month.
Shop hard before committing to a mortgage
Your mortgage and occasionally a car payment should be the only rolling debt you have if possible. That said, many people won’t even buy those things on credit. They rent or they buy in cash after years of saving. The truth is, a mortgage is fine if you get one that is very light on the fees and expenses. Shop around extensively to find the best possible deal and then pay ahead when you are able. The less you spend on fees and interest, the less debt you will have in the future.
If you could not buy it in cash, you probably should not buy it
Debt free living is really about spending less than you take in and holding on to the overage. If you don’t have the money in the bank or put away to buy something, you probably should not be purchasing it if you want to be debt free. Consider your ability to pay something back within four weeks and avoid the purchases if you are unable to do so. This is not always possible, but the majority of purchases can be managed in this fashion.
Save early and often
The best pathway to a debt free existence is saving. If you have money put back, it builds your buying power. Keep in mind that you need to stay ahead of your purchases with your bank account. If you are buying something and have the money to pay cash within your budget, you would be silly not to do so. That will never happen unless you save your money early and often. Put back and you will enjoy the benefits the rest of your life.
Commit to keeping a budget and sticking to it
A solid budget that is reasonable and doable is a very important part of debt free living too. If you don’t know what you are spending, the chances of you actually going into debt are quite high. We naturally will spend more than we have if we are not keeping up with it. Keep a solid budget and stick to it like glue for debt free living.
Learn the beauty of build-up purchasing
Back in the days of old, people put money back until they had enough to get something. That led them to appreciate things even more because they had all that time to look forward to what they were getting. They also controlled their money better because of it. This same old school rules will work for today if you want to be debt free.
Although I do want to be debt free, I’m not one willing to go overboard to do so. I always start by asking myself do I really, really need this item. If it’s something I really want I use the above steps to help keep me on budget. It’s pretty reasonable and it really does help. I have been a bit impatient when it comes to something I’m really excited about getting though. In this case, I tend to sell items on Craigslist to help speed up the money saving process when needed. I have an article that will give you the in’s and out’s of Craigslist on How to Successfully Sell Items on Craigslist. It’s definitely worth reading!
Check out this Total Money Makeover from Dave Ramsey!
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