10 Tips To Achieve Financial Freedom
It is not impossible to be free of debt and achieve financial freedom. Just follow these steps and commit yourself to reaching your goal.
1. Face reality
It can be a daunting task, but first things first, sit down and write down how much you owe including the interest, whom you owe it, and when you’re supposed to pay. It is very likely that you are taking your debt payments less seriously as you should be because you only see them as small payments you make each month. When you look at the bigger and more complete picture, however, you will see how important it is for you to aim to pay off your debts as soon as you possibly can. Make sure you miss nothing out, don’t forget to check old bank statements. Once you have it in black and white and have faced it, you can now start taking the steps to kill it.
2. Spend only on absolute necessities
Until you’ve paid off all your debt, stop spending on things that you don’t need. You have to learn to be satisfied with the things that you have now and resist the urge to go shopping or eating out. It is very important that you stop acquiring more debt. You can reward yourself after you’ve succeeded in freeing yourself from debt.
3. Earn more money
Even a small increase in income is very helpful. The more money you have set aside for debt payment, the sooner you can finish it off. There are a lot of part-time jobs available that you can take on during your free time. Here are a few which are highly recommended:
- IncomeElite – a massive membership site, packed full of step by step make money online plans, reports, audio and video, and it’s updated every month. There’s also the Community Hub where members can meet, exchange info and ideas, ask questions, meet the core team and join in the Elite Stealth Projects, where members are given a chance to work on group projects, with the core team and other members, making their chances of success and monetary rewards far greater.
- Paid surveys – one of the easiest way to get some additional income is by doing paid surveys from this genuine program.
- Writing – If you like to write, this is for you. Cash4Writing will teach you how to make money from writing!
- Blogging – If you yourself is a blogger, EasyCashBlogging will show how to turn your blog into an affiliate marketing gold mine, cheaply and without any experience!
4. Set aside money for yourself
Every pay cycle, it is important that you set aside right away some for yourself that will cover everything that you would need to spend money on. As much as possible, you should try to reduce your expenses, but skimping on your “miscellaneous” expenses may backfire when your budget goes out of whack. Limiting yourself to a specific budget will make it easier for you to resist spending on unnecessary stuff.
5. Don’t save
Saving money in the bank is less practical because the interest you earn is actually much less than the money you will save by reducing your debts with high interest rates. If you have savings put aside, you should immediately use them all to pay off some of your debts.
6. Apply for a loan
Apply for a consolidation loan ONLY when you are in such a bad state that you can’t even make minimum payments on all your debts and bills. Try to get the lowest rate possible and keep the term down because this loan will also become a part of your debt budget. Again, your goal is to finish off your debts as soon as you possibly can.
7. Live frugally
It does not have to be a sacrifice. Here’s how:
- Instead of going out at night to drink twice a week, just do it once and spend the other night drinking at home. It can also be enjoyable and the liquor will be cheaper.
- Buy generic products instead of the more expensive, branded ones. The name of the product you use should be less important than the money you can save.
- Start buying in bulk.
- Always keep your eyes out for good deals and coupons.
- Stop buying pre-packaged or prepared meals.
- Be aware that certain meats, like chicken, are more expensive when you buy them skinned and boned; you can do this at home yourself.
Aside from saving plenty of money, there are other rewards to frugal living. You learn a lot about survival and taking care of yourself. When you seek out ways to reduce your spending means, you exercise your brain, learn to do more things on your own, and learn to be practical; these will eventually give you a sense of accomplishment and pride in your efforts.
8. Use credit cards
If you have one that is not maxed out and with a low interest rate, you can use this to pay for a higher interest debt. Every penny counts even if the interest savings are low. If you have maxed out your cards, on the other hand, they’ll serve you better cut up and in the trash. You can get a pre-paid credit card for absolute necessities.
Allocate your money with a wisely-and-honestly-thought-out budget. Include your total income and your total expenses plus your spending money in the budget, but exclude your debts. You will then know how much surplus money you have left, set this aside for your debts. Be honest when you create your budget, include every expense, and only the necessary ones, so it does not collapse on you, it is your lifeline. Most importantly, stick to it. Don’t lose sight of your goal.
10. Separate debts budget
Make a separate budget for your debts. Your debt budget will reflect what you owe and how much to pay on each one. Once you have figured out your regular budget, you will know how much surplus money you will have left post-expenses. Transfer all the surplus to your debt budget. It is your key to financial freedom.
Itemize your debts in order, from highest interest paid to lowest. On all but the highest interest debt, pay the minimum amount required. Your aim is to get rid of your highest interest debt first. Once this is done, use 100% of the money you used to pay for that debt on the next highest interest debt. Keep doing this and, before you realize it, you would have quickly paid off all your debts. The snowball effect is the best strategy to use in debt reduction.
When you are finally debt free, you can now use all the money you used to pay them off and put them in the bank and investments. You’ve done fine without these extra money, it would be wiser to start saving up for the future.