5 ways to achieve a better and debt free lifestyle

Debt can affect our lives in several ways and in more ways than we think, creditors can make your daily life miserable and poor credit may ruin your chances of financial success and even getting a job. With the stress of dealing with your financial problems, your personal relationships can be destroyed. Personal debt arises from several factors such as getting a loan or making a purchase and yet the financial resources to cover the expense are not available. As time goes by, one finds that the debt begins to increase and before one knows it; their good credit is falling and making payments is a struggle. Eliminating debt and its effects in one’s life requires elimination of the debt step by step, while conserving one’s resources.

Stop adding to your debt.

To live a debt free life, one could start by stopping additional debt such as eliminating credit cards. If you cannot afford a product or service now, ultimately you will not afford it in the future. If one cannot do without a credit card try using one, it has a low limit and normally monthly payments do not exceed 25 percent of one’s income.

Learn to save.

When faced with a debt crisis, only then is the value of saving realized, one should try saving at least 10 percent of one’s savings or anything one can. Make it the first priority one attends to, start by creating a savings plan. It could involve simple self oriented tasks like buying cheap items when you go shopping, making your own coffee instead of going out for coffee or even boiling your own water instead of buying bottled water. With such simple changes in one’s saving culture, one would realize that they could save a lot within a month.

Making a debt repayment plan

Make a plan on how to pay all you debt; you could decide which debts to pay first. Choose the ones with the high interest rate a technique also known as laddering. Alternatively, the reverse laddering technique could be used which basically involves paying debts with the lowest balances first followed by one with the next lowest balance and so on. This allows you free up more cash enabling you to focus on reducing the debts with higher interest rates. This method is effective because it allows reduce debts with high interest rates since you pay more amounts, in addition it is more faster since you paying small amounts which just prolongs the period of payment.

Show willingness to pay your debts

Talking to your creditors makes you life much easy this is because if you ignore them and do not keep in contact they will do the same. Showing then that you are willing to pay the debt and even suggesting a workout plan will show you as honest and pleasant and even might compel them to reduce your interest rate.

Always plan.

Planning is the most important factor to get rid of debt in your life, planning is more about controlling your finances than about limiting your enjoyments. Planning allows you to enjoy the pleasures of your life because everything is taken care of. Once your debt repayment and expenditure plans are taken care of, there is nothing that will make you lose your peace of mind.

About the Author:
Matt is a business blogger who usually write about finance and business related topics. He also writes for Today in America. Now watch today in America on Youtube.