When it comes to living a debt free life it is quite difficult. The vast majority of people are in debt of some sort, whether it is a small loan from a friend or family member, a larger personal loan, a car hire finance package, or something as large and long-term as a mortgage. There are some on-going debts that we all have to face, and bills to pay regularly. However, we can all learn how to live in certain ways to ensure that we can increase our chances of living a debt free life, or at the very least ensure we are not beholden to our debts and our lives crippled in the process.
We should all be able to have a balanced financial life that allows us some pleasure in life and the chance to explore and have fun leisure time with friends and family. Depending on your income and type of employment this will differ from person to person, but it is achievable.
The first step is to put together an extensive list of financial items, including all incomings and outgoings in your life for each month. What this does is immediately makes it entirely clear where you are at financially, which bills are paid and when, as well as the personal debts that you have incurred and are in the process of paying back.
List the debts separate from the everyday bills that we all face, such as rent or mortgage, utility bills, council tax, mobile phone bill, and monthly groceries. Once you have the personal debts in place, you can work out how to tackle it. You could take the option to consolidate your debt into one larger loan. Or you could choose to tackle each debt individually, attacking the smaller debts first to get rid of them over as short a period of time as possible. This immediately gets you into a positive habit of making payments. If you can afford to pay more than the minimum payments each month do so, as this lowers the overall debt paid back over time (as you will be reducing interest attached to the initial amount and the time it takes to pay back the debt in full). You’ll fee great getting rid of your smaller debts and the habit will carry on into attacking the larger debt amounts.
If you are currently in a small financial fix and are worried about taking on a large amount of debt, you could instead seek to take out a small, short-term loan. Payday loans or instalment loans from responsible and reputable payday loan companies that have come about in the last few years, are a great way to cover a short-term drop in cashflow, without adding any extra pressure to your finances. If you are currently working your way out of a large amount of personal debt, this could be the short-term fix to cover you without you heading back into a greater amount of financial difficulty and a larger debt problem.