Getting out of debt is without a doubt the number one New Year resolution for every individual deep in debt. Ask anyone who is struggling with debt what their new year resolution is and they will always tell you that they are resolving to be free of debt before the year lapses. While it’s easier to state, the challenge is in becoming debt free. Well, the truth of the matter is saying you want to be debt free is one thing and putting in place measures to achieve the same is something else altogether. To be debt free requires sacrifice and sticking to a plan however harsh it might be.
It means that you need to go out of your comfort zone to achieve the ultimate price which is financial freedom. Ask anyone with a huge debt and they will tell you that they never have peace of mind. They are always stressed, not happy and at times even resort to have their own company as they don’t want to interact with individuals whom they supposedly owe. That notwithstanding, the wish of every person embroiled in debt is how to ultimately get out of it and be debt free. Well, getting out of debt is not nuclear science and only requires sacrifice, determination and a well thought out plan. So how can you get out of debt in simple steps?
Desist or simply make a conscious decision not to engage in further borrowing
Unchecked borrowing is the reason most people find themselves in deep debt. To get out of debt faster, it is essential that you make a conscious decision not to engage in any further borrowing. Stop signing up for new credit cards, stop borrowing money to buy furniture simply because they look elegant or test driving new cars when you know very well that you do not have the finances to buy it. You need to make a conscious decision not to borrow and stick to it. By so doing, you focus all your energy on your current debts and how to become debt free.
Establish an emergency debt
Well, you might not understand why it’s essential for you to establish an emergency fund but the reality of the matter is that we live in an uncertain world. An emergency can occur any time and you need to be cushioned. If you don’t have an emergency fund, you will be forced to borrow in order to attend to it. If your goal is to get out of debt, your sole objective is to establish a buffer between you and any kind of debt. By so doing, you no longer rack up more debt but rather focus on becoming debt free.
Work on a realistic budget
If you are deep in debt, it is important that you scrutinize your lifestyle and find out where there is wastage. What unimportant things do you spend most of your cash on? Are you a spendthrift who more often than not engage in impulse buying? If that’s the case, create a realistic budget and stick to it. If you have many subscriptions, it might be time you toned down. If you go out or eat out every week, you might want to consider putting that off until you are free of debt. Focus on eating homemade food for a while and channel that money towards paying off your debt.
It is essential that you organize your debt from the largest to the smallest. Endeavor to pay off high interest debts without failure and if possible consolidate all your debts so that you be dealing with only one debt payment per month. You can seek for expert help to assist with organizing your debt if you find the going tough. The idea is to ensure that you get out of debt as fast as possible.