5 Steps to Free Yourself from Debt

You are having a big headache with the debt piling up on your desk. You start to think that living without debts can never be a reality. Do not be afraid as it is not impossible to live a life without debts. However, to achieve this goal where you are free from any debt, determination and discipline are needed. It may take up your time therefore patience is needed. Just follow these 5 simple steps given and you will be well on your way to living debt free.

Admit the problem

First of all, you have to admit that you are facing problems in settling your debt. There is no running away from the debt and you ought to know that. There is no point leaving your unpaid debt or bills lying around and do nothing about them. The debt and bills will not go away on their own. And keep in mind that it might turn out really bad if you ignore them over time. Do something about your debt now and wait no longer. Find solutions for debt reduction as soon as possible. The sooner you settle this burden, the faster you will be able to enjoy your life.

Assess the financial status

Secondly, make an assessment on your financial status or condition. Write down all debts on a piece of paper. Do not forget to write down the creditors names as well. Write the creditors name and the amount of interest that you have paid, or you need to pay. This will definitely be able to help you to get a clearer picture on your financial status. With this, you will be able to choose the right debt solution to solve this matter.

Prioritize the debts for settlement


Third, decide which debt you should put as a priority. You have to know which debt you need to settle as soon as possible. It is advisable to settle debt with the highest interest rate followed by the lower interest quoted for you. With this method, you will be able to save up quite a sum of money in a long run. However, keep in mind that it is best to pay a little more than the minimum repayment that you should pay. This is because the minimum repayment usually covers the interest part only.

Create a monthly budget

Fourth, create a practicable monthly budget for yourself. You will have to plan your monthly expenses wisely and cut down on those which are not a necessity. Put food, household expenses, fuel, education fees and health expenses as priorities. Where else entertainment or activities such as movies, outings and clubs should be put to a stop temporarily until you find that you are able to cope with your debt.

Seek professional help

Lastly, if are not capable of settling the debt on your own, do seek a professional to help you. Professional credit counseling, debt consolidation and debt management is available to help you and the financial experts will guide you on what to and what you should do next. Once you have completed the course of action outlined you will achieved your goal of financial freedom.