The 3 Step Process to Living Debt Free

by Redeeming Riches on October 31, 2014

living-debt-freeThe Three Step Process to Living Debt Free

Living debt free may seem like a daunting and perhaps hopeless endeavor for many people. Whether you have school loans to pay off, an impossibly high mortgage, or have a tendency to over use your credit card, debt can add up fast. In today’s world people are bombarded with products, services, and items everywhere they look. Everyone wants to have possessions, a nice house, and a car or two in the garage all while supporting themselves or a family. The question is, how does one achieve this without accruing debt?

Step One: Get Rid of Credit Card Debt
Credit cards are the number one offender in accruing the worst kind of debt. Yes, there is both good debt and bad debt. An example of good debt would be having a house payment, although you may owe the bank a large sum of money it ultimately helps build your credit score and the chances of you making money off of your house one day are high. Credit cards on the other hand are bad debt. You do not benefit off of the money you owe on a card in any way, shape, or form. If you don’t make your payments on time, your credit score goes down. So, what should you do about credit card debt? The first step is to get rid of every credit card you have, cut them up and throw them way. If you don’t have a card available you can’t use it to accrue debt. Next you need to figure how much money you owe, make sure you take into account all of your credit cards. Take a look at your bills, come up with a total, and make a plan to pay them off. Once all of your debt has been paid, cancel your cards and never look back.

Step Two: Live Like You’re Broke
The next step in the process is to live like you’re broke. Most people that have large bank accounts don’t spend their money frivolously. Give up going out to eat, cut your cable package in half, go on one vacation this year instead of two, and don’t go on weekly shopping sprees. You can start cutting out coupons, browse clearance racks, or turn down the heat in your house. Basically, live your life like every penny counts, people spend absurd amounts of money of things they simply don’t need.

Step Three: Save, Save, Save
If you want to be living debt free, save your money. Take money out of every paycheck and put it in your savings account, it doesn’t matter of its $10 or $300, every penny counts. Speaking of pennies, start a change jar. Empty your pockets of spare coins every night, you will be amazed how much that will add up over a year’s time. Saving money will counteract any current debt you have, pay off a bill at the end of every month with money you have saved. It may seem difficult at first but after a while you will adjust to having a certain amount of money every month and learn to live within your means. That’s another good point, living within your means implies not spending money on extravagant items that you don’t need and you can’t afford without accruing debt.

If you want to be living debt free, get rid of those nasty credit cards, be frugal, and save your money. Like anything else, this process will take time so be patient with yourself and start small.

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