14 March 2017

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Simple Guide to Become Debt Free in No Time

debt free checklist"A man in debt is so far a slave" ~ Ralph Waldo Emerson

Do have huge debts? If yes, this provides you an excellent working plan and best practices to follow to become debt free.

If you stuck with debts, no financial planning work better for you. Whether to create an emergency fund or investments for future all will fail when debt push back you and  there are only little room for success.

Most of us might have debt and most of the time it is  manageable. But, when it grow huge,  it would land you to deep financial trouble..

One must be bold to take action when in the middle of debt. It is not easy to eliminate debt in a or two day, but disciplined and  intelligent planning would certainly help you to come out of debt without giving much pains.

What should be the first and important move to become debt free? Be bold. We have options.. such as simplest ways to become debt free

These are the simplest and excellent, working plan for people to follow and become debt free gradually and completely:

Prepare and action plan - If you are the one suffering from huge debt should start work from scratch. At the very first, discuss with your family on the actions you have planned and make them aware.  Ensure full support from your family members, relatives and close friends until you reach to the goal. Start by listing all the debts in a paper. Prefer to list down debts based on higher to lower interest rates. At the end, you will be able to identify which debt has more interest rate and eating up  your money more. If you have number of loans and bad debts, consider consolidation on bad debts  and work out for better results.

Start controlling expenses - Prepare a well disciplined plan to eliminate the debts gradually but regularly. Start from self by reducing your expenses to minimum. Tight your monthly budget and spending. Count and make each penny work for you at this point. Avoid spending on anything other than the necessities like your monthly bills, food, transport etc. this is not the time to purchase costly cloths, video games etc. Be self disciplined to live within the budget along with other family members. 

Cancel additional credit cards and start using credit cards only at emergencies. Stop all the activities like eating out, leisure, monthly shopping, traveling, holidays etc., but focus to save maximum money until being debt free.

Prepare for unexpected crisis - Prior to start the debt free process, identify and set aside
a small amount as emergency fund to deal with unexpected crisis. This should be kept in a separate account as untouchable. This will work for you as an emergency fund to meet any crisis happening at the middle of your ‘being debt free’ journey. This reserve money ensures you to not touch on the money kept for paying off debts.

Start elimination of debts - Start eliminating your debts one by one by paying maximum amount to the debts which have high interest rates and minimum amount to the one in your list which has lower interest rates. Push maximum money to the one with top interest rates to eliminate that debt first. Continue this process to the next in your list, until eliminating each debts.

Additional support options - Consider creating additional source of money to pay off the debt. Having a second income through any family member would be a great help to focus more to kill your debts. Explore and identify all possible sources and work to generate maximum possible additional income to support your action. Consider to sell/rent all those items, spaces, vehicles that you are not required more.

Monitor the developments - Record each and every activity and analyze progress of your action. Any mismatches to any items found, take necessary actions to rectify that. Give clear attention to the bills, credit cards or wherever money involved.

A Final Advise:

Once become debt free, stick with your budget to not fall to the debt trap again. At this time, rework on your family budget to get some relaxation. Cut down all unnecessary expenses, identify and generate secondary income stream, prepare your plan to shield yourself and family from panic situations like economic recessions.

Determination and discipline are the two most required qualities for any person for fail proof financial planning. Being debt free is not simple if you don’t have well decided mindset and clear working plan along with dedication and discipline and family support.

Once after being debt free, never commit the same mistake again. Be disciplined on self and family expenses, credit card usages, borrowing etc. Preserve each penny for a bright feature of self and family.