At some point or other, you might have faced a situation wherein you have a debt to pay off. This may be due to unforeseen sudden expenses. Also, with the current situation of covid, people are even more prone to debts due to the current economic scenario – with people losing their jobs or taking pay cuts and business shutting shops.
A major chunk of the population is depending on their credit cards or by taking loans to pay off their expenses This ultimately leads to piling up of debts.
But worry not! We have got your back. We will tell you five easy and simple steps for you to inculcate in your daily life. Following them would ensure that you do not land in debts and have a stress-free life. Let us look into the steps with no further delay.
What Are The Five Steps To Be Followed To Become Debt-Free?
Pay in Smaller Instalments and Clear The Debt.
When you have a big debt to be repaid, what works is when you break it down into smaller amounts. You should then make it a point to consistently pay these amounts every week or month based on what you set the goal.
Thus, it would feel realistic to repay the debt when you have smaller goals than paying back the huge debt at once. If you neglect and do not follow a plan, then you might end up taking many years to spend the same amount that you could have paid back in a smaller period of time.
Make It a Point To Make Faster Payments.
One way to pay the least amount of interest is to have faster payments to clear the debt. When you are in the process of clearing off a debt, the interest will be charged on the time period you take to clear the whole debt.
Thus, when you make faster payments like bi-weekly, semi-monthly or even weekly payments, you clear the debt in a short time span. Thus, the interest charged would be lesser. Doing so would save money as well as time.
Avoid Impulse Buying
When you actually track your expenses and look into it, it might take you back. You would then realize that you incur many expenses impulsively, which you can easily cut down on.
These might be buying something that you liked when you came across it without thinking much whether you really need it. Also, there are expenditures that you do not really notice much like downloading of unnecessary apps or ringtones or subscribing to unnecessary channels, among others. Realizing them and ensuring that such expenses do not happen the next time would help you stay debt-free.
Keep Track of Your Expenses
Half the battle is won when you track your expenses. Tracking your expenses is a prerequisite for you to implement your budget plan. Tracking might seem tedious after a point of time but sticking to it makes the whole difference. Try different and fun ways to track your expenses like using an app or a tracking notebook.
Create and Follow A Plan
A plan is all about making a choice every time to spend only the amount set in the plan so that you would be able to save what you need at the end of a month or year. Thus, creating a plan and spending according to it makes a huge difference. Saving just $10 every day would save you $300 every month. Setting a goal of saving $10 every day definitely looks much easier and possible than saving $300 a month at once.
Becoming debt-free is not as difficult as it sounds. When you start implementing the above steps diligently and consistently, it actually becomes easier. If you are inconsistent, it would surely not be possible, and you would lag in your clearance of the debt amount. Thus, it is all about the slow and steady effort from your side that would make the whole difference. What are you waiting for? Follow them right away and get debt-free.