become-debt-free

Want to become debt-free soon? Avoid doing these things

Hope you have read my previous article on this topic. In today’s post, I just thought of sharing some more interesting facts regarding this matter. Do take a glance below.

Becoming debt-free may seem like a herculean task for some individuals. But, believe me, getting out off debt is not at all a rock hard task. You can easily become debt free but, first you must stop doing things which accelerate the “getting into debt process.”

What you shouldn’t do when in debt

Check out the things you should avoid if you want to ditch debt soon:

1. Borrow from retirement fund

If you are thinking of using your retirement fund to pay off your dues, then stop immediately. It’ll leave you broke later in life.

Even worse, you may get heavily penalized for withdrawing money from your 401(k) retirement account.

So, first think how you want to spend your gray hair days, and then decide whether or not to use the retirement fund to repay dues.

2. Purchase luxury items

You can breathe in the fresh debt free air if you stop spending on luxury items. If you continue purchasing luxury items (such as an expensive car, jewelry, or house) while in debt, it’ll put unnecessary pressure on your pocket. And, hence getting out of debt would seem a rock hard task.

3. Keep cable TV connection

There is no point in keeping both your cable TV and the internet connection (especially when you’re in debt) and waste your precious dollars. You can watch your favorite shows online once the show airs. Moreover, you can also grab some really good web series streaming online.

4. Go partying with friends

You cannot afford to go partying with friends when you’re broke. Use that money to pay off your dues first, which you would have otherwise wasted by partying with friends. Instead, find out some less expensive sources of entertainment.

5. Take up costly hobbies

Picking up a new pricey hobby such as aviation, sky dive, ballroom dancing, scuba diving, or mountain climbing (unless you’re making money from it) when in debt is not a smart idea. If you’re good at photography or art and crafts, you can sell your crafts or photographs to get some extra cash and be free from your financial obligations.

6. Visit Starbucks regularly

Most of us have this habit of visiting Starbucks on a regular basis. But, do you know that you can save quite a lot of money if you ditch the Starbucks? Yes, it’s true. So, avoid visiting Starbucks and make your favorite latte at home so that you can save more money in the long run.

7. Go on expensive vacations

When you have loads of debts to pay off, you can’t afford to enjoy an expensive vacation. There are more important things like paying bills, mortgage, home and car repairs, and so on, which need more attention at this point of time. However, you can always go on vacations once you’re debt-free.

8. Quit job without having another one

Quitting your present job without having another one in the queue is risky. With having a job lined up, you won’t have a gap in pay.

9. Spend time doing unproductive work

Doing something that you cannot achieve right now is not at all a smart move. For instance, thinking or spending time behind opening your business when you already have huge debts is not a good idea. By doing so, you’re simply wasting your time, money, and energy.

It’ll be more productive if you spend time on thinking how you can repay debts. Or, you can think of taking up a part-time job so that you have extra money to clear your dues.

10. Lie to your spouse about your present financial condition

Keeping financial secrets in your marriage causes divorce in most cases. So, it’s advisable that you shouldn’t hide any financial matter from your spouse, especially when you’re in debt. Sharing your financially upset condition with your husband/wife will help you deal with the matter better.

Do you have any other points to share? Feel free to comment below.

Categories: Debt

how-to-live-on-a-tight-budget

Unable to survive on a shoestring budget? 7 Tips to help you

Do you often eat out? Are you addicted to Starbucks? Do you frequently visit movie theaters? Do you hit the malls regularly? And, have these habits of yours made you a broke? If so, then you must stop these immediately and pay attention on how you can save the rest of your precious dollars.

Tips to live on a shoestring budget

Living on limited money is not too difficult. You just need to make some lifestyle changes and be patient. If you are thinking how it is possible to live on a tight budget, check out these tips for further assistance:

1. Make a realistic budget and stick to it

Now, when money is limited you have to make a fresh budget. Don’t make a budget right away.

Instead, try to adopt steps like consider your income, calculate your expenses, make savings (both for retirement and emergency), pay off dues, set financial priorities, and so on.

You can make a successful realistic budget if you follow these steps religiously. And, most importantly, you should stick to your budget no matter what.

2. Separate wants from needs

It is the best way to help you stick to your budget.

Find out what items you really need and what you think you need.

Jot down the things you purchase regularly and separate your needs from your wants. Try to reduce the items on the list.

3. Cut out cable TV connection

You are wasting a lot of money if you like to watch TV in your free time. Cut out cable TV connection and find out other activities to keep you engage. For instance, you can spend time with your family, read books, and so on.

4. Give up gym membership

When you are on a tight budget, you must give up your gym membership in order to save more. Instead, try to run, walk, or cycle in the fresh air. Not only it’s good for you body, but also it’s healthy for your wallet.

5. Look for ways to make more money

Pulling off daily expenses can be tough when you have limited money. In this case, you must find out other ways to earn money like do freelancing, work extra hours, deliver newspapers, do babysitting or pet sitting, etc.

6. Save more and spend less

Someone rightly said a penny saved is a penny earned. Whenever you spend wisely, you tend to save money. So, think twice before spending each penny.

Consider these things to save more:

  • Make a new dish with leftover food.
  • Shop at thrift stores and garage sales.
  • Purchase things in bulk.
  • Look for coupons.
  • Do comparison shopping,
  • Cook your meal at home.
  • Find out ways to save more on utility bills.
  • Find out inexpensive entertainment sources.
  • If you don’t have a party attire, borrow one instead of purchasing it.
  • Eliminate bad habits like smoking, gambling, excessive drinking, impulsive buying, and purchasing lottery tickets.

7. Make cash payments

One of the best reasons to use cash is that you can keep track of what’s going out of your pocket.

In financially tough situations, you must stop making payments with your credit cards as it’ll entice you to spend more. If possible, freeze your cards for the time being. However, you can always start using them once your finances are under control. Also, never stop using your credit cards forever. Because it’ll take a toll on your credit score.

Do you have some other helpful tips to share with us? Do write to us in the comments below.

You may find this helpful:
How should you manage your finances from your first paycheck?

Categories: Personal Finance

tips-to-repair-credit-card-debt

Is repaying credit card debt a herculean task? 6 tips to the rescue

Credit card debt is the most common and dangerous form of debt owed by most of us. If you have credit card debts, don’t let them paralyze your financial torso. Instead, take charge of your financial health and try to solve your monetary issues before it’s too late.

Figure out how you can defeat credit card debts and make your finances smile again:

1. Pick up one debt at a time

If you carry a balance on multiple credit cards, make sure to pay the minimum on each card. After that, focus on paying back the entire balance on 1 card at a time.

You can choose one of these methods to clear your dues:

  • Debt Snowball – In debt snowball method, regardless of the interest rates you start paying the dues from the smallest balance to the largest balance.
  • Debt Avalanche – In debt avalanche method, irrespective of the balance you carry on your cards, you pay back the debts from highest to lowest interest rates.

2. Make more than the minimum payment

If you continue paying only the minimum amount on all your credit cards, it takes longer to pay off the bills and become debt free. But, if you pay more than the minimum, you pay less toward the overall interest rate. Keep aside some extra money from your paycheck so that you can pay more than the minimum on your credit cards.

3. Consolidate your credit card debts

It often gets difficult to manage multiple debts at a time. In this case, you can opt for debt consolidation, which combines all your debts into a single monthly payment.

You can consolidate your credit card debts in 3 ways, which are:

  • Credit card debt consolidation program – It combines all your bills into a single affordable monthly payment with a lower interest rate.
  • Balance Transfer – All your balance is transferred to a card with lower interest rates or to a 0% APR card (the 0% interest rate is usually available for a certain period of time).
  • Credit card consolidation loan – You take out a loan with a lower interest rate and pay back all your dues.

Note: Read more about these 3 credit card debt relief options here.

4. Fix the loopholes in your budget

Recheck and prioritize your budget and find out the places to cut down your expenses.

For instance, you may get discounts if you get internet and cable connections from the same service provider.

Also, try to hit the stores with a shopping list so that you don’t end up buying unnecessary items. This way, you can fetch extra money to pay back your credit card debts.

5. Be organized

Take a spreadsheet and fill out your credit card details such as the amount of debt and the interest rate on each card. By organizing your dues in this way, you’ll get a clear picture of the total amount of debt you need to pay back. Thus, it’ll help you create a proper debt repayment plan to get out of debt.

6. Take up a part-time job

If you’re not left with enough money to repay your debts after meeting all your necessary expenses, do a part-time job (at least till you pay back your dues).

For example, you can teach, do freelance writing, babysitting, event planning, and so on.

Do you know any other tips to help you pay off credit cards easily? Share your views with us.

Categories: Credit