When you\u2019re in debt, there are so many consequences. For example, if you\u2019re not debt free it may be difficult to get a car, a home or even a job! That\u2019s right, some employers will check your credit before they hire you.<\/p>\n
If you\u2019re in debt, there are steps you can take to become debt free. In this guide, you\u2019ll learn how to:<\/p>\n
It\u2019s time to get out of debt. Here\u2019s how to do it!<\/p>\n
Your employer may have <\/strong>given you an hourly rate, or you may be employed on salary. Either way, you may not be getting paid as much as you think you are. Once you factor in taxes, for instance, you\u2019re probably making far less than your job description promised.<\/p>\n You\u2019ll also need to<\/strong> factor in the days and weeks that you don\u2019t work. As an example, if you\u2019re an hourly employee and you get a week or so off for a summer holiday or the winter holidays, you obviously won\u2019t be paid.<\/p>\n Sit down with your<\/strong> income statements or pay stubs and determine just exactly how much you\u2019re getting paid each year. Then, divide that amount by 12 and you\u2019ll have your monthly income. That\u2019s what you\u2019ll use as a baseline to work with.<\/p>\n There are basics that<\/strong> you\u2019re absolutely going to need to pay for. Your rent or mortgage, your utilities, your student loans (possibly \u2013 we\u2019ll talk more about this later) and paying down your debt are just a few examples. You need to find out exactly what you need to earn each month just to cover the basics.<\/p>\n Budget it all out on <\/strong>paper. Go back through your bills or contact your utility provider to find an average cost of water and electric. Remember \u2013 this is just the basics. Rent or mortgage and car note for instance. Do not include food, childcare, cable, cell phone or other \u201cextras.\u201d There are lists available<\/a> online to help make sure you list them all.<\/p>\n Add all of the basics<\/strong> together and this is what you need to be earning each month to stay debt free. Hopefully, you are! If not, you\u2019ll need to make some adjustments.<\/p>\n If you\u2019re in a<\/strong> nation where you can get a copy of your credit report, do it today! If not, talk to a representative in your area who can look into your financial portfolio to determine precisely what your debts are.<\/p>\n You may owe a monthly<\/strong> amount for a credit card. You may have back due taxes. Amounts in collections with a third party agency. Some odd amount an old landlord says you owe. It could really be anything from an old eviction to a movie of the month club.<\/p>\n Find out exactly what<\/strong> you owe, and to whom. Is there something you can pay right now? Today? Do it! This will help you become debt free faster \u2013 after all, that\u2019s one bill out of the way, right? But knowing exactly what you owe will help you know exactly how much you\u2019ll need to set aside toward bills each month.<\/p>\n Each month \u2013 or day<\/strong>, if you like \u2013 keep track of where your money is going. You obviously need to know what you\u2019re spending money on in order to find out where you can save it. Write down everything \u2013 your bills, sure. But don\u2019t forget about the pack of peanuts at the gas station and the tip you left to the barista at the coffee shop. Every. Single. Dollar.<\/p>\n Only when you know <\/strong>the \u201cextra\u201d stuff you\u2019re paying for will you be able to determine where you can cut back and what your daily expenses are truly like. You may be surprised to learn what you\u2019re spending your hard earned cash on. From movie tickets to cigarettes, every dollar you spend counts.<\/p>\n You\u2019ve probably heard<\/strong> of the many instances of credit fraud and identity theft all over the world. This is more prevalent in some nations than others, but it could very well happen to you!<\/p>\n If you see debts <\/strong>you don\u2019t recognize, you\u2019ll have to find a way to dispute them. Depending upon where you\u2019re from, this may be through contacting the lender, through a dispute with the reporting agency or even with an attorney.<\/p>\n It\u2019s important that<\/strong> you don\u2019t just pay these debts or ignore them entirely. Fraud is a real thing, and someone out there took out loans or created accounts in your name, he or she can do it again! Get to the bottom of it, as continued fraud will never<\/em> lead to a debt-free life.<\/p>\n In some cases, people<\/strong> get into debt because of poor financial planning or decision making. In other cases, it\u2019s simply because they\u2019re not earning enough. Bills pile up and loans are acquired, making the amount of debt that much larger.<\/p>\n You need to honestly<\/strong> evaluate whether you\u2019re earning enough money to cover your expenses. If you\u2019re not, it\u2019s okay. You have a few options. The first option is obvious: find a new way to earn income. Begin applying for higher paying jobs or pick up a side gig or two. We\u2019ll discuss this more later.<\/p>\n The second is also obvious<\/strong>, but may seem difficult at first: you lower your expenses. This may mean moving, negotiating with utilities companies or trading in your vehicle for a less expensive model.<\/p>\n The point is this:<\/strong> if you don\u2019t have the means to support your current expenses and lifestyle, you\u2019re going to need to make it so that you do. Otherwise you\u2019re not going to be debt free, as you\u2019ll continue to accumulate bills and loans just to make ends meet.<\/p>\n Your rent or mortgage<\/strong> probably isn\u2019t going to be negotiable. In fact, those costs may even go up. However, there are expenses that you may think<\/em> are fixed costs that really aren\u2019t. Take childcare, for example. Childcare is super<\/em> expensive if you\u2019re bringing your kids to a daycare center or a private school. To save money, look into a group childcare share or home daycare options.<\/p>\n Your food budget <\/strong>is another. Do you really need to eat out three times each week? Even when you\u2019re home, it\u2019s almost guaranteed that there are ways to cut back on food costs. We\u2019ll discover a few of these in later sections.<\/p>\n Transportation costs <\/strong>\u2013 do you need both vehicles? Sure, you may not be driving both, but you\u2019re still paying for insurance, taxes, registration and maintenance on both cars.<\/p>\n Entertainment is a<\/strong> huge<\/em> one. People pay for Netflix and Hulu and HBO and cable and internet. You don\u2019t need all that! The same goes for your cell phone. Look, back in the days before Android we did<\/em> survive. Our GPS system was called a map. We didn\u2019t have internet on our phones \u2013 in fact we didn\u2019t even have internet for a very long time.<\/p>\n Re-evaluate your<\/strong> expenditures and be honest with yourself \u2013 what can you do to make your cost of living cheaper to help you get debt free?<\/p>\n It\u2019s not uncommon for<\/strong> a college graduate to have two or more student loans they\u2019re paying down each month. Sometimes, a graduate will have as many loans as one per year of school attended!<\/p>\n Now, it may seem <\/strong>that that makes sense, but in all actuality, it is a huge problem. See, as you\u2019re paying off your student loan debt, the loan agencies will first apply your payment to your interest rather than your principal. That means you\u2019re literally going nowhere, or progressing toward being debt free at a snail\u2019s pace.<\/p>\n Talk to lenders about<\/strong> consolidating your student loans. This might be as simple as a phone call and a few signatures if your loans are all through the same lender. If you used multiple lenders, you may need to speak to a third party agency to consolidate<\/a> your student loans.<\/p>\n When you consolidate<\/strong> your student loans you\u2019re increasing your ability to pay toward the principal on your loans and not just the interest. That will make if easier for you to pay the loans off and be on your way to becoming debt free.<\/p>\n If you\u2019re a homeowner<\/strong>, you may want to consider your mortgage to see if you can bring your monthly costs down. There are a few ways that this may benefit you, including a lower interest rate, a shorter mortgage term or lower monthly payments.<\/p>\n Simply using rough<\/strong> numbers and not including interest, let\u2019s assume you owe $30,000 on your home that you\u2019ll need to pay off within the next 15 years. After talking to the lender, you may be able to refinance that principal to allow you to pay off $30,000 over 20 or 30 years instead. That can literally halve your monthly payment.<\/p>\n A more favorable interest<\/strong> rate will also be an obvious benefit to you. If your credit has improved, or if standard rates have dropped since you first obtained your mortgage, you can apply to take advantage of lower monthly rates.<\/p>\n Here\u2019s the trick to<\/strong> becoming debt-free. If you do qualify for a lower monthly payment, plan to pay the same amount as you\u2019ve been paying all along. That way your payments will be going more toward principal than interest and you\u2019ll pay it off more quickly!<\/p>\n If you\u2019re driving <\/strong>a Porsche but have a Pontiac budget, it\u2019s time to rethink your car. Take a look at what you\u2019re paying for your car loan each month and see if there\u2019s a way you can bring that amount down. Trade your car in for a smaller vehicle, or refinance your auto loan in the same way you would a mortgage.<\/p>\n But be sure to think<\/strong> beyond the loan! Sports cars, for instance, have higher insurance premiums and sometimes higher repair costs. Large trucks will cost you more for fuel than a compact car or sedan. Local taxes may be higher for one type of vehicle than another. Calculate exactly what you\u2019re paying each month and figure out how you can bring that amount down.<\/p>\n As with any of your<\/strong> other loans, to become debt free, plan to pay the same amount that you\u2019d been paying previously. This will allow you to pay off your vehicle more quickly and own your car or truck free and clear.<\/p>\n Do it today, if you can<\/strong>. Some credit card issuers won\u2019t allow you to fully cancel until your balance is paid in full, but at the very least cut them up or shred them and don\u2019t make any more purchases. Then, as quickly as possible, pay off the remaining balance and cancel the account.<\/p>\n Now, if you\u2019re in the<\/strong> process of looking for a new house or similar, it may be in your best interest to have one account open. Keep that account\u2019s spending at $0, though, to avoid getting yourself into further debt.<\/p>\n To put it simply<\/strong>, to be debt free you should avoid lines of credit that will get you further into debt. If you must, keep one credit card open and hand it to your mom or your sister for safekeeping. Only use it in case of emergency, like medical expenses or auto accidents. Hopefully, you\u2019ll never need to!<\/p>\n This is another<\/strong> obvious way to become debt free, but making more money doesn\u2019t necessarily mean you need to quit your job and become a lawyer. Instead, why not find a few unconventional ways to pay down your bills?<\/p>\n Now that you<\/strong> know exactly what your bills are, it should be easy to begin paying them down.\u00a0 But with what money? You already know your paycheck covers just the basics. Where is this extra cash going to come from?<\/p>\n Well, you can feel<\/strong> free to use your imagination! You can walk dogs or tend gardens. You can be a freelance graphic designer if design is something you\u2019re good at. You may choose to rent out a room in your house, or even your garage if you\u2019re not using it. Someone can use it as a workshop, right? You may even choose just to sell some of your old things.<\/p>\n READ MORE <\/strong>– 12 Simple Job Just Anyone Can Get<\/a> It doesn\u2019t really<\/strong> matter how you make the money, so long as it\u2019s legal and that you put it aside. If you need to, open a separate bank account dedicated solely to paying down your bills, and deposit earnings from your side gig into that account as you earn them.<\/p>\n It\u2019s probably a good idea <\/strong>to get a separate account anyway. That way, as you begin to cut back on your expenses, you can be diligent in transferring what you would<\/em> have spent into that account. For instance, imagine you cancelled cable. That\u2019s probably around $80 per month you can put into this new \u201cdebt free\u201d account. Simply commit to the transfer and your savings will grow very quickly.<\/p>\n It\u2019s not just cable and cell<\/strong> service, either. Cut back in little ways. Quit smoking. Make your coffee at home. We have listed oodles of ways that you can cut back on day to day living expenses on this site. As you read through our guides, choose a few you like. Then, instead of spending $4 on coffee each day, you\u2019ll be able to transfer $20 each week into your new account. That\u2019s over $1,000 each year!<\/p>\n If you like, you can automate <\/strong>this process. There are certain savings accounts that will automatically withdraw from your checking each week, bi-weekly or each month. Calculate what you would<\/em> have been spending on extras and have that amount automatically deposited into your new account. One and done!<\/p>\n Again, you now know what<\/strong> your debts are. It\u2019s time to tackle them in a logical order, right? Why not try snowballing them?<\/p>\n To snowball your debt,<\/strong> you\u2019ll need to list each of your accounts from minimum to maximum total. Your minimum could be something as small as a library fine. Your max is probably something like a student loan or your mortgage.<\/p>\n Cut back on your monthly<\/strong> spending in the way we talked about in previous posts, and then deposit the savings into your new account. Continue to pay your normal obligations like credit card bills, mortgage payments and student loans, but just the minimum.<\/p>\n Now, if you\u2019ve followed the<\/strong> steps above, you\u2019re going to have some excess income. You\u2019ve been depositing that income into your new account. Once you hit a dollar amount that allows you to pay off the smallest bill, pay it! You can then cross it off your list and move on to the next one.<\/p>\n You\u2019ll still set aside <\/strong>the same amount of money each month. Just because one debt is paid off doesn\u2019t mean you have extra cash in hand. Instead, deposit it into your new account until you have enough to pay off the next biggest debt, and so on. Before you know it, you\u2019ll finally be working on your largest debt and well on your way to becoming debt free.<\/p>\n There are companies out there<\/strong> that promise they\u2019ll consolidate your debt, raise your credit score and have you sneezing rainbows \u2026 all within a month! Please do your research before you hire one of these firms. Sure, there are legitimate companies out there who will negotiate with the people you owe money to. But a vast majority of these people operate in a sketchy way. Here\u2019s what we mean.<\/p>\n A debt reduction agency<\/strong> will have you sign a contract, in which a certain amount of money will be drafted from your bank account on a predetermined schedule. This money is supposed to be used to pay down your debt, once it accumulates to a certain point.<\/p>\n Of course, there is<\/strong> a fee for the service \u2013 after all, they\u2019re doing work for you! They\u2019re contacting the people you owe money to and trying to talk them down into forgiving or settling your debt. Meanwhile, your \u201csavings\u201d account is growing.<\/p>\n However\u2026<\/p>\n Many people who have<\/strong> used these services say they simply don\u2019t do what they say they\u2019re going to do. They collect their \u201cfees\u201d and never do the work of negotiating your debts.<\/p>\n Folks, you can do this<\/strong> yourself! You<\/em> can take money and put it aside into a savings account while you<\/em> talk to the people you own money to. Try to see if you can reach a settlement amount, or if you can pay in full and have the item removed from your credit report.<\/p>\n What\u2019s more is that you\u2019ll<\/strong> be earning interest on the money you deposit into your new account rather than paying<\/em> money to someone who doesn\u2019t do anything on your behalf. Yes, debt is overwhelming, but you most certainly can do it yourself. Information is available online, at your local library and even through social media as to how you can DIY the debt reduction process without hiring a third party scammer.<\/p>\n You don\u2019t need to <\/strong>set up a GoFundMe or beg your friends and family for money to help you become debt free. All you have to do is be honest with them and with yourself. Tell your loved ones that you\u2019re trying to improve your life and become debt free. That means you\u2019re also trying to save money and not overspend.<\/p>\n You\u2019ll be surprised at<\/strong> the reaction you\u2019ll receive. At first, your friends and family may \u201cforget\u201d and encourage you to go out for drinks on Thursday night or to dinner on Saturday. Stay strong! After a while, you\u2019ll start to see a change.<\/p>\n Instead of a trip to the<\/strong> theater with your buddies on the weekend, your buddies will begin to suggest a stay at home \u201cdate\u201d to stream the latest DC Comics movie. Instead of dinner parties, they\u2019ll start suggesting pot lucks.<\/p>\n Everyone wants to live a<\/strong> better, debt-free life. Once your friends and family begin to see the changes you\u2019ve made to your own finances, they\u2019ll be quite supportive and want to follow suit!<\/p>\n No one wants to be in debt. Unfortunately, debt does happen. So when you\u2019re trying to become debt free it may seem overwhelming. With determination and discipline, you can reduce your bills steadily and surely until you\u2019re finally living the debt free life you\u2019ve always wanted!<\/p>\n","protected":false},"excerpt":{"rendered":" When you\u2019re in debt, there are so many consequences. For example, if you\u2019re not debt free it may be difficult to get a car, a home or even a job! That\u2019s right, some employers will check your credit before they hire you. If you\u2019re in debt, there are steps you can take to become debt free. In this guide, you\u2019ll learn how to: How to become debt free without feeling the pinch How to stay out of debt so that other aspect of your life will be easier Tips and tricks for budgeting and living within your means It\u2019s time <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_cloudinary_featured_overwrite":false,"footnotes":""},"categories":[7],"tags":[],"class_list":["post-320","post","type-post","status-publish","format-standard","hentry","category-loans"],"yoast_head":"\n\n
2. Figure out exactly how much you need each month<\/h2>\n
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3. Know what your debts are<\/h2>\n
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4. Find out what you\u2019re spending money on<\/h2>\n
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5. Check for debts you don\u2019t recognize<\/h2>\n
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6. Are you earning enough?<\/h2>\n
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7. Determine what expenses are flexible<\/h2>\n
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8. Consolidate your student loans<\/h2>\n
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9. Examine your mortgage<\/h2>\n
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10. Examine your vehicle expenses<\/h2>\n
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11. Cancel your credit cards<\/h2>\n
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12. Make more money<\/h2>\n
\nDO NOT MISS THIS –<\/strong> Ultimate (SUPER) Guide For Making Money Online<\/a><\/p>\n\n
13. Speaking of separate accounts\u2026<\/h2>\n
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14. Try snowballing your debt<\/h2>\n
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15. Avoid debt consolidation companies<\/h2>\n
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16. Ask family for support<\/h2>\n
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Conclusion<\/h2>\n