You can live a debt-free lifestyle by applying a dash of creativity, knowledge and discipline. Debts tie up your finances, cornering you into a trap and restricting your lifestyle. Over time, the constant pressure of debts can invade your health with complications such as high or low blood pressure. It can also compromise your relationships.
Get rid of debt and live the life you deserve! Below are eight tips to help you live a debt-free lifestyle:
Tip #1: Track Your Spending
We live in a swipe-first, ask questions later society. The use of non-money credit cards promotes impulse purchases without any real sense of the cost that comes with using cold, hard cash. Although credit cards are convenient, they make it easy for people to purchase items on impulse, to live beyond their means. If you track your expenses, you will learn some sobering lessons that will force you to come up with a better strategy for managing your finances.
As the world transitions into a cashless era, there’s a need for financial education. People should be reminded that money is still money, whether you spend it using a credit card, debit card, or any other cashless system. Be as frugal with your spending as you would if you’re handling actual cash. This alone will set you off into a debt-free journey.
Tip #2: Boost your Income
If you want a debt free lifestyle, why not extend your means to boost your current income. This is an effective way to live a debt-free lifestyle. You will reach your financial goals quickly. There are short-term income solutions, such as taking a second job or getting a payday loan for supplementary cash before your next paycheque.
As you consider such solutions, factor the tax implications of earning extra money, so you don’t end up owing additional taxes. Other solutions include opening a side business that you can run part-time while working your regular job.
You can also make money with your hobbies during your free time. Ideas include baking, creating art pieces, training newbie swimmers, etc. You can also boost your income by building multiple, passive income streams. You can do this by developing a solid base of extra income-generating activities to boost your revenue. For instance, you can start a blog, a YouTube channel, get into online writing, or set up a website.
Tip #3: Plan your Budget
Failure to plan is one of the key reasons people get into debt in the first place. You can’t be debt-free if you don’t know what your net income and expenses are. You need to know your daily, monthly, or yearly expenses and income. Try to think ahead into the future and plan for any relevant event to avoid surprise expenses. Set targets to bring your spending is under control. As much as possible, service your financial obligations without having to rely on debts.
Tip #4: Build Large Savings
Savings can quickly make you financially secure and provide you with a safety net in case of an emergency. By adopting a savings lifestyle, you avoid a situation where you borrow to pay for necessities and emergencies. Setting aside a portion of your finances every month can be hard, but by adopting restrictive habits, it’s doable. Life’s unexpected costs will creep up on you if you don’t have a hefty balance in your savings account to keep you on the debt-free side of life.
Tip #5: Avoid Credit Scams
Another way to live a debt-free lifestyle is to watch out for credit scams or credit repair temptations. Some companies and individuals will approach you with an appealing offer to clean up your credit reports so you can get a loan, mortgage, or a job, at a fee. The truth is, after paying these companies or individuals, you will be worse off than you were before you did. Some will take your money, offer nothing, and move on to defraud another victim. If an offer is too good to be true, it is! Shun it!
Tip #6: Avoid Education Debts
Finding a way to get that college education is paramount, and sometimes this includes incurring debt. However, if you’re not careful, what seems like a long-term investment could become extremely costly. Start by taking up a limited loan to cater only to your educational expenses, not your personal expenses. This will keep your debt burden low.
Consider cutting off the need for loans after one academic year by working part-time jobs as you study. Apply for scholarships and grants from various public funding sources, including state and federal awards, to live a debt-free lifestyle.
Tip #7: Compare Prices before making Major Purchases
Research prices before making a significant purchase. It might also be wise to wait for a sale. It’s possible to purchase the same high-quality product from another firm, or of a different brand, without breaking the bank. By comparing prices, you can make significant strides towards a debt-free lifestyle.
Tip #8: Invest for Retirement
Start building a retirement nest as soon as possible. Relying on social security benefits alone isn’t enough. Only a handful of employers offer pensions after retirement. It’s, therefore, crucial to invest for retirement. There are many schemes in the market you can take advantage of to pay fewer taxes on your retirement investments.