In a monetary economy, it’s very easy to get into debt.
Sample this – you are a parent with a child who has just graduated from high school. After a short wait, the college acceptance letter finally arrives. The good news is you have been admitted to a prestigious university.
Once the excitement dials down, your mind sets the gears rolling. How much is required for tuition, accommodation and books? Yes, you are able to afford the first year but what about the other years? What if my parents are both fired from their jobs? Will they continue paying for my education? This and other questions are running through your mind but wait…the federal government runs a student loan program.
You apply, the application is accepted and your education is funded. After completing your education, you are met with a rude shock. Not only are you required to repay your student loans and credit card debts but well paying jobs are not readily available.
So, how do you eliminate debts from your financial record? Here are vital tips to help you become debt free.
Start by making monthly payments
When you have a debt for example car payments, credit card or student loans, the first thing you need to do is make monthly payments. Yes, you have not been able to get an office job albeit a well paying one. This does not mean that you should forgo on settling your debts.
Not doing so from the word go will mean higher interest rates and late fees. Furthermore, the financial institution will report you to the credit bureau. As a result, you will be locked out of future financial opportunities.
To earn an income, seek new opportunities in freelancing, social media and YouTube among others. They will keep you busy and allow you to earn an income which can be used to settle monthly payments.
Develop a budget
Now that you are earning an income whether from your part time job, from YouTube videos, trading, running a home online business or freelancing, it’s time to learn how to budget. Creating a budget will eliminate chances of spending a lot of money on luxury items that you don’t need. Yes, you want to own the latest iPhone or Samsung Galaxy smartphone but do you really need it? If you already have a working phone, why not spend the money towards settling your debts.
Developing a budget is quite simple. All you have to do is list your income sources and respective amounts. Next, list your expenses and respective amounts. Now this is a problematic area. Since you are on a journey to becoming debt free, limit your expenses to essentials only. For example rent, food, grocery shopping and bills among others. Cut off unnecessary expenses like eating out, ordering in or drinking coffee from the closet cafe. Instead, prepare your own meals and beverages. Stick to your budget every month.
Sell all items you don’t need
So, you charged a few items on your credit cards and you used them only once. Now, they are keeping your closet interior warm and occupied. What you don’t know is that stuff you don’t use can be converted into extra cash you need. Pick a particular weekend when you are not too busy. Ask a few friends over to help you. Start by combing through your closest and all rooms. Use stickers to indicate items you don’t need and are planning to sell. When you are done, create an inventory. This will allow you to keep track and know how much you have earned after selling them off.
There are several avenues you can use to sell off your unused items. If you have gaming accessories and other electronics, use eBay, GameStop, Craigslist or garage sale. This is same with all other items. You can become innovative and use social media apps like Facebook Live and Instagram. Once you receive the money, don’t spend it on more luxury items. Settle your debts!
Seek new opportunities
So, how many months or years have gone by since you started your journey towards becoming debt free? Still working at the same job earning the same income? Well, it’s time to upgrade. You don’t have to be a slave to your debts. Life is too short for that. You need to travel and see the world. Take a holiday to rejuvenate your energy levels and much more.
By now, you have gained a lot of experience in your respective field. Are there new job opportunities in your area that fit your expertise and knowledge? Don’t restrict yourself to your area only. Venture to other regions. Talk with recruiters online and let them provide you with new opportunities from upcoming startups. This will be a great adventure for you. Furthermore, you will get to settle your debt and have more money to spend on a few luxury items.
Let’s face it. No one desires to be in debt with a financial institution or even friends. But, there are circumstances that compel you to seek a loan so as remodel your home, buy a car or pay for college. To ensure that you are debt free, it’s wise to start paying off your debts immediately. This will alleviate a great financial burden off your back and allow you to achieve financial freedom.