It’s a sad truth that most of us are in debt.
Even without counting mortgages, which is in some ways a debt that many of us aspire to. We have credit cards, loans, student loans, store cards, personal loans, finances on purchases and more.
For many of us, the repayment of debts accounts for a good chunk of our income. We struggle financially. We are unable to save because each month we are spending a large amount of money paying off debts. We’re paying money out on things that we bought a long time ago, most of it, in fact, is merely interest. We’re spending money on nothing.
Our debts over time can cost us a fortune, and we should probably know better. But, we live in a society where debt is a normal part of life. Credit cards are offered when we are young. They seem like a good idea at the time, and then we are stuck on a downward spiral into a life of debt.
Becoming debt free is something that many of us aspire to. It’s certainly possible to pay your debts off with commitment and hard work. But, for many of us, the real problem is staying that way. Let’s take a look at some of the habits of people that manage to live a debt-free lifestyle to help.
Change Your Mindset
With credit all over the place, it leads us to believe that we can afford anything. We’re promised finance in the store, and it seems easier to spread the cost even if we can afford things out right. If you want to live debt-free, you need to change your mindset. Only buy what you can afford to pay for cash in hand. See credit as something for emergencies, and not a routine part of life.
Get What You are Owed
Another mindset change needed is pride. Many of us are too proud to ask for what we are entitled to. If you’ve been involved in an accident, contact Car Accident Lawyers and get what you can. Claim any benefits that you are entitled to and ask for what you are owed. Don’t let others be in debt to you if you want to be free of debt yourself.
Learn to Save
If you want to stop seeing your credit cards as a cover for all unexpected expenses, you’ll need something else to cover these costs. Start saving a little when you can, and it will soon start to add up to a substantial fund. Use apps and other tools to help you.
Create a Budget
If you want to save and avoid debts, you need to learn how to manage your money. A household budget can be an incredibly useful tool if you use it properly and if you are honest with yourself. Your budget should include everything. Don’t miss things off or underestimate your expenses to make the final figures look better. In the long-term, this won’t help.
Take the time to do it well. Go through all of your receipts and bank statements and make sure that you are realistic about your income and expenditure.
You don’t need to be exceptionally frugal and thrifty to stop borrowing. You just need to be careful and live within your means. Start thinking before spending and make small changes like writing meal plans and shopping lists, get into the habit of filling in your budget and think about money every day. Get into the habit of checking your bank balance, and make daily efforts to be careful with your money.
Keep Things Simple
Often we struggle with money because we overcomplicate our plans. We have savings accounts here and there. We have different debts. We have targets to save for different things, and we use different cards to make different payments. With so many accounts, funds and debts, it can be hard to know exactly where your money is and how much you’ve got.
Keeping things simple makes it much easier to manage your finances. If you can, consolidate your debts and make your first goal completely clearing them. Have one savings account and one debit card.
Add an Income Stream
If you find that most of your income is taken up with debts and bills, you might struggle to save or find yourself relying on credit cards to pay for luxuries. Finding a new income stream, a side income around your job can give you a little extra pocket money. Look for ways to make money online to help.