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Become Debt Free

Debt free living requires a change in attitude about money. Indeed, if you are in debt, and you wish to become debt free, you will need to make substantial changes to the way that you spend, save and manage your money. If you are not in debt right now, then it is an excellent time to develop the good financial habits that will keep you out of debt in the futures. Here are some ideas that will help you as you make debt free living a habit:


  • Pay your bills on time. This is very important. You need to be in the habit if knowing roughly when certain bills are due, and how much they will be. You should make sure that you pay them on time, and the full amount that is due (or the minimum payment). When you do this, you avoid late fees, and you show that you are responsible in a financial sense.
  • Try to pay more than the minimum. This is especially important when it comes to credit cards. The minimum payments are designed to barely cover more than your interest charges each month. This means that your debt will go down much more slowly when you only pay the minimum. Plus, much of your payment goes to interest charges which are simply fees that do nothing besides enrich your creditors.
  • Attempt to keep your debt level low. This is very important. Not only can your debt level affect your credit score, but it also begins to rule your financial life. You do not want to be in a great deal of debt. One problem can destroy your personal finances when you have a high debt load. Do your best to avoid using debt to pay for things. Also, try to avoid having a lot of available credit. Carefully choose which credit accounts you will keep open.
  • Only charge what you can actually afford. Credit cards come with many valuable rewards programs. This can make it tempting to charge your expenses. Remember, though, that interest charges detract from the value of your rewards. You should only charge what you have the money for. Pay off your balance each month. For large purchases, try to carry a balance for no more than three months. The longer you carry a balance, the more you pay in interest charges.
  • Build savings accounts. Remember to set some money aside. If at first it is only a small amount like $50 a month that is alright. The idea is to get into the habit of setting aside money for savings. Consider opening a retirement account to fund your future, and build an emergency savings fund that is available for you when something unexpected comes up. This way, you will not always have to turn to your credit cards in order to get out of a pinch.
  • Use honesty when considering your financial situation. It is very important that you be brutally honest with yourself concerning your finances. Keep track of your spending (and your income) and watch you are spending your money on. Are there places where you are wasteful? Do you have a debt problem? These are questions that may have unpleasant answers. However, in order to turn things around and build a more secure financial situation, it is vital that you honestly look at your spending habits, and do what you can to correct them.
  • Keep track of your personal credit report. Another important step to ensure debt free living is to keep an eye on your credit. This is your financial reputation. You need to know what is in there. If you see inaccuracies or are worried about fraud, it is important to take immediate action. Otherwise, you can find yourself in serious financial trouble.
  • Create and follow a budget. One of the most important things you can do for your financial future is to create and follow a budget. Do this by tracking your income and expenses, and creating a plan for spending your earnings wisely. Your budget should include long and short term savings, emergency funding, taking care of needs like home, bills and groceries, and only paying for wants when all the other things have been taken care of and if you have enough money left over.

By exercising restraint and responsibility in your personal finances, you will find that it is possible to enjoy debt free living.



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