Lying awake at night, you imagine how much money you could have if it wasn't for those enormous credit card payments. You could take a carefree vacation. You could fix up your house. You could BREATHE a lot easier.
Debt free living seems like a dream to you.
Did you know that five simple steps put you on the road towards a debt free life?
Starting any new process requires a new way of thinking. The first step towards a debt free life is changing your way of thinking about EVERY purchase you make. You MUST ask yourself this single question when considering spending your money; does buying this product take me towards my goal or away from it? This single question will halt your impulse buying and curb your spending habits.
The second step is that you must make short term and long term goals. Your long term goals revolve around paying off all your debt, saving for a vacation, and paying for college. Short term debts include paying off credit card A, paying off credit card B, have $100 in savings in twelve months, and anything else that builds towards those long term goals. Post these goals where you see them every day. These goals will keep you motivated.
Thirdly, put away those credit cards. Look over your credit card bills, especially those department store cards. You could easily be paying 24% in APR interest. Credit cards are the easiest means of collecting debt. If you must make credit card payments, earmark that money in your checking account so you can pay it off each month. Make sure you don't miss any payments on those credit cards. Late fees are killers when it comes to getting out of debt.
The fourth point is budgeting. If you really want debt free living, you must be budgeting. A budget accounts for every penny that comes in and funnels it where you want it to go. Start by recording all your monthly income. This can be regular income, social security checks, passive income sources, or anything else that comes in on a regular basis. Now record your average expenses for a month. Create a list of expenses so every bit of your income is accounted for; this is where the hard part comes in - you have to make it balance out if you want to end up debt free.
Lastly, getting out of debt takes time. Reward yourself now and then. Buy yourself lunch if you've been brown-bagging it for the last two weeks. Buy yourself a great cup of coffee if you've cut out snacking for the last ten days. As long as you reward yourself in moderation, your travel down the road to debt free living might just result in your first debt free day.
Chris Huff runs a debt free living web site providing information on debt reduction and how you can kill off deadly credit card debt. You can sign up for the 5 Step Debt Reduction Strategy or read the daily debt blog. For more information, please visit the website.