Getting Out of Debt and becoming Financially Free
Do you know that a lot of people are in debt, maybe you are also in debt, from credit card debt, student loan, mortgage loan, car loan, etc. Debt can be very emotional with disturbing and distracting thoughts over how and when to pay. A lot of us got into debt because we wanted to live beyond our means or because we were desperately in need of money. Two times to never go into debt is when you are in desperate need of cash and when you want to live beyond your means.
What if you are in debt, how do you get out?
A lot of people have found themselves in a situation where they do not know how to get out of debt or not to get into debt. I will be looking into this in this post.
Work on the debt mindset
You are in debt thanks to your understanding about money. One thing you need to fight first is your understanding about money and how it works. If you cannot fight your thoughts about money and looking at the right method to handling financial problems, then it will be difficult getting out of money troubles.
Have an emergency fund
An emergency fund is one thing that only 1 out of 20 people have and those who have it might not have enough money to keep them for 6 months. It is important to have an emergency fund should in case you are in a financial trouble. Having a savings for emergency is very important and should be considered if you are looking to become financially free and out of debt. This money isn’t to be spent, rather it should be kept in case of rainy days.
Budget wisely
This is very important I must say although it is very difficult and boring. Budgeting is important into getting to know how much is coming in and how much I going out. The difference between a person that spends excessively and a person that doesn’t is budgeting. A budget should be a list to show you how much you are spending and how much you are getting as well as how much you will be will be willing to cut down in expenses.
Say no to debt
You do not have to be in debt in your life. Buying things you do not need is very bad as it will keep you indebted. Your credit should be used to get things that will fetch you money and not things that will take away money from you. The earlier you pay off your debt, the better for you.
Invest for the future and not now
When you are done with clearing out your debt, the next thing to do is invest and one very way to do this I to invest in stocks, bonds, and real estate. You need to keep growing this until you can no longer worry about how much income you make. When your passive income is enough to feed and attend to all your needs, then you are surely rich.
