How To Get Out Of Debt And Live Debt Free
A life in financial crises and debt cannot be said to be a success. Today, I’m moved to write on the issue of debt, and to help the millions of people who are in one form of debt or the other: credit card debt, mortgage loans, auto loans, etc., to find the solution to their debt problem, and to begin to chart a course of getting out, and freeing themselves from the shackles that debt places on its victim’s shoulders.
A lot of people are already so much deep in debt that it doesn’t seem they could pay it off for the rest of their lives. And of course, the greatest thing they would wish for is the solution: how to be free from it.
So much have been said and written about debt, how not to get into it, how to get out of it, etc., and on the Internet a great deal of information is available, suggesting different ways for anyone to reduce or completely live debt free.
But all of these will not give you much result without a strong understanding of how you got into debt the first place, and then be courageous to accept the changes you have to make to get out of it and put your finances in proper shape.
In this article, I will primarily be addressing people who are already in debt, and are looking for the solution. I will be taking them through the way of life that leads not to debt, but to wealth, success and fulfillment. And if they follow this way, they will definitely be free of debt, and build a financially secured future.
What I’m about to share here is equally useful to you if you are not in debt, but would want to be armed with the information to guide yourself against falling into it.
So if you are sick and tired of debt, and you are ready to get out of it, and gain complete freedom over it, come along with me:
The Turning Point Question: How Did I Get Into Debt?
I call this question the turning point question because it causes you to halt for a moment from the usual way of life that has brought you into debt, and to challenge the situation. It causes the solution you need to live debt free to emerge, because solutions will naturally come when questions are asked.
If you can be courageous enough to ask yourself this question, then you are on your way to a debt free, and financially successful life. It means you are prepared to make the changes you have to make to get out of debt.
The simple answer to how you got into debt is that your spending is more than your income.
That’s just it! The money you are making in a week or month, as income is not up to what you spend in that period of time. The difference is debt. The more you continue in this habit, the deeper you go in debt.
Therefore, to be free of debt, it means you have to watch two critical factors in your financial life. These are: How Much You Earn, and How Much You Spend. And the latter must never exceed the former.
If what you earn in a month is $3, 000 dollars, you must be disciplined enough to ensure you don’t spend more than that; else you are going down in debt.
As simple as this debt free solution is, it remains the greatest challenge millions of people are facing daily as they grapple with their debt situation. They just cannot stop spending above what they earn!
Now, the next question you must again ask yourself to be free from debt is, “Why can’t I spend below my income?†I will give you the reason:
Credit Card Companies Don’t Really Love You
We are in a society where the culture of buying now and paying later is immensely deep-rooted. And because human beings generally want to have almost everything they see, even when they cannot afford it, they are easy prey to credit card companies who lure them to obtain their cards and go on a spending spree.
They begin to buy all sorts of things, most of which they don’t really need, and may never be used. But what they don’t know is that, though they are not paying for them immediately, they are still going to pay for them, not at the normal price, but at a far higher price, and they end up also paying charges on their credit cards for life.
You must be smart if you want to live your life debt free. Don’t create financial prosperity for other people who use you as a dumping ground for their products you don’t need. Neither should you be a money cow to credit card companies who entice you to get their cards and then milk you of your money forever as you pay charges on the cards.
Don’t fall into the debt inviting habit of buying before earning, rather, turn it around and spend only after you have earned. This way, you will be in control of your finances, and when you go further to ensure that what you spend is below what you earn, you will be able to pay off your debt, and build up savings.
What Loans Are You Taking?
Taking loans is another form of ‘buying it now before earning the income to have it,’ that could lead to debt, depending on what the loan is for. I have to draw that line because some loans can be beneficial to building your finances and your success in life. However, to avoid falling into debt, or to be free from it completely, you will need to assess the type of loan you want to take along the following parameters:
Will the loan help you to achieve personal development, and financial success?
Will it enable your productivity on your job or business to increase or improve? Will it enable you to save money on the long run?
These are questions you have to subject every loan desire to before you either go for it or not.
For instance, loans such as student loans, mortgage loans, and auto loans are loans you can go for because in one way or the other they can help you to make more money. Such spending are actually investments that can pay you back a great deal in future.
With a student loan you can conveniently go to college to develop yourself, including developing marketable skills that would enable you to achieve financial success and live a debt free life.
Mortgage loan enables you to own a house and enjoy the comfort and convenience of a shelter. In your own house, you are more stable to handle the daily challenges of life and win. You will better be able to set forth your creative juices to increase your productivity and make more money.
Apart from the stability that owning your house gives you, the value of the property is likely to increase in future, and you can sell it off if you choose, and make a huge profit, after the loan is paid up.
Auto loan equally has the same potential to help you make or save money, except if you are buying the car to maintain an extravagant lifestyle. If you are taking a loan to buy a car to make your business activities or going to work easier, you will be more efficient in your business or work, and you will be able to make more money.
But if the auto loan is to add another flashy car to your fleet, without any possible way that you could make or save money by it, then that’s an invitation to debt. A lot of people are in financial wreck today because they cannot keep their extravagant lifestyle in check. They just can’t stop buying anything glamorous even though they don’t have the means to have it.
You mustn’t fall into this trap, and if you are there already, you can begin to reverse this debt embracing habit, and get your finances back by subjecting any loan you want to take to the above questions and see if they have the potential to help you make or save money. If they don’t, then don’t take them.
To this point I have dealt on the importance of you taking control of your spending habit to keep you free from debt, which is one of the factors you must watch to stay free of debt. Now I will talk on the second factor:
Increase Your Earnings
The surest way to a debt free life, secured financial future, and the opportunity to contribute to helping other people is to Increase your income and Decrease your spending.
Just as it is important to keep your spending in check, it is equally vital to continually seek ways to increase your income. The more your income, and less your spending, will result to surplus in your account. And you will then have enough to reach out to other people who need help. You will be able to find the greatest fulfillment in life by lifting other people from their pains as you sponsor a philanthropic cause.
There are always additional ways of making more money legally in any industry if you search for it. I will love to share some insight in this with you, but that will be in another article, so do check back for it later.
That’s it friend, follow the path I have explained in this article and you will definitely get out of debt and enjoy a life of financial freedom!
Read about how a family got out of $106,000 debt: The Hildebrandt’s Out of Debts Success Story.
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Its true, getting tied up on debt and freeing yourself from it is quite difficult. Once you get free, you feel relieved like a bird free on flight. Getting a loan to pay another has been a common pratice in our place. I tried living loan free, its stressfree too,you know. This article remnds me of a saying ‘live within your means’. When the time comes that what you earn basically goes entirely to debt and leaves you no more room to move. Without debt, then you’ll get a hand of your earning after quite sometime. Ive’ read,too, that ‘income less savings equals expenses’ a formula that helped me out too. I appreciated this a lot. Thanks!
Debt is the major reason why most people don’t succeed in life, no matter how hard working they are. Until people realize the implications of borrowing, they will remain in bondage. Thanks for this enlightening article.