Simple Ways to Maintain a Debt-Free Lifestyle Forever

According to the report of The Urban Institute, 77 million Americans are in credit card debt. The report is indicating that people are becoming reckless credit card users to maintain their lifestyle and ignoring their credit card bills.

Unfortunately, debt is a way of life for most of the people in our nation. Now most of us think that debt is the medium to get things in life.

No, debt is not the ultimate, it can be an exception. Debt spoils the peace in your life. It is dangerous and welcomes financial instability. You should try to get out of debt and remain debt-free in your life.

The struggle of staying debt-free

A debt-free lifestyle not only gives you mental peace, it also offers financial freedom. However, getting financial freedom is not easy. You have to make some sacrifices. You need to be determined to remain debt free forever. To do so, you may experience some things that you may not have expected. Some costs that you may need to pay to maintain a debt-free lifestyle like the pressure of managing money properly, fear of skipping monthly bill payments, and stress due to overwork. However, taking these costs into account, people who are living a debt-free life agree that the struggle is worth it.

How can you embrace a debt-free lifestyle easily?

Well, changing a lifestyle is not easy. It requires your commitment for living a financially disciplined life. At first, it can be difficult for you to lead a debt-free lifestyle, but once you infuse some good financial habits you can adopt a debt-free lifestyle easily.

Here you go:

1. Save enough money

The main reason for falling into debt is lack of savings. People either use their credit cards or take out a loan to fulfill their desires. When you have a saving cushion, you can easily use the money without accumulating debts. Also, you need to be prepared for some future expenses like education cost for your children,  medical cost, and cost of buying a new home. Thus, the importance of good savings is crucial.

How can you save more?

• Eliminate unnecessary expenses

To save more money, you need to eliminate all the unnecessary expenses first. Try to reduce your expenses by $200 or more a month. To do so, you need to analyze your previous spending. Check out your credit card statements, or old bills to identify the expenses you are paying are not necessary. By doing so, you can save some more.

• Create a spending plan

After cutting down unnecessary expenses, you need to create a spending plan (Budget) to track your money. By following a budget, you can easily understand where your money is going. Thus, you can control your spending. It will also help you to pay your monthly bills while setting aside a certain amount. Make sure you set aside some money for savings while creating your monthly budget.

• Boost your income

If you see that your spending is more than your earning, then you have to increase your income. Otherwise, you will not be able to save money even after cutting down extra expenses. Because, expenses increase day by day, so you have to increase your net worth.

2. Practice self-control

In short, you have to live within your means. To do so, you need to say “No” to many tempting things like eating out, fancy shopping, lavish traveling, and frequent partying, etc.

When you are trying to stay away from debt, you shouldn’t accept every invitation to go out to eat with friends or party every Friday night.

Practicing self-control and the ability to curb the desire of spending money are the crucial things to maintain a debt-free lifestyle.

How can you practice self-control?

I agree that this practice isn’t easy, especially for people who love spending. But, it can be a little bit easier once you define your needs and wants logically.

Your needs are something that you have to have and your wants are something that you would like to possess.

Balancing the needs and wants can help you to demonstrate self-control. By doing so, you will be able to fulfill long-term goals over the year.

3. Get ready to overcome an emergency

A lot of people say that they accumulated debt due to an uncertain emergency. Since they had no money in hand, they had to take out a loan to overcome the situation.

Yes, the scenario is quite possible and can happen to anyone. An accident, job loss, illness, and car breakdown can happen anytime. Thus, it is important to build an emergency fund to avoid accumulating debt to overcome an emergency.

Remember, you need to save at least 3-6 months of savings in an emergency fund.

4. Become a responsible credit card user

As I mentioned earlier, most of the people are in credit card debt trouble because they are not responsible credit card users. People should understand how to use credit cards properly. Keeping multiple types of credit cards and swiping them recklessly can create trouble.

Remember, when you are buying an item with your credit card, you should make the payments within the stipulated time. If you don’t make the payment, you start accumulating interest.

How can you avoid using credit cards randomly?

Use a credit card only when you know you can afford the bill. Remember, reward points and discounts are all marketing gimmicks created by the credit card companies. So, you shouldn’t spend more than your affordability just to earn the reward points.

• Use cash as much as possible

Using cash is a good way to avoid credit card debt hassle. People often spend more with a credit card because they don’t need to pay the bill immediately. When you carry cash, you have to stop spending when you are out of cash for the day.

This practice can help you to stay away from costly credit card debt.

5. Payoff your existing debts

Paying off the existing debt is necessary to make yourself free from debt trouble forever.

Ignoring a debt doesn’t help to mitigate the problem. Your creditor or lender can sell your debt to the collection agency. It will create more trouble for you. Thus, you have to get out of your current debt by following a solid debt relief strategy.

How can you pay off your current debts?

There are many ways for coping with debt. You can opt for the legitimate debt relief assistance from some debt relief companies or you can pay off your debt on your own by following some DIY debt relief methods.

Remember, if you think making the minimum payments on your debt can help you to get out of the debt, then you are wrong. You have to make the larger payments toward the highest interest rate debts to pay them off faster. Once you pay off your existing debt, try to avoid further debt.

Lastly, considering major lifestyle changes can be difficult for you, but keep in mind that you’re doing it for your financial wellbeing.

Author bio: Amy Nickson is a web enthusiast. She loves social media, as it gives endless opportunities to reach out to a larger audience in a more unbiased way. She also loves writing financial articles and always search for good platforms to share her personal financial insights. She is not an expert, but her life taught her a lot of things in a hard way.