Debt Free Living

Isn’t it everyone’s dream to live debt free? For people who have even typical debt like car loans, a mortgage and a credit card or two, living debt free seems about as realistic as growing wings and flying. However, there are a surprising large percentage of Americans who actually live debt free. You can do it too if you make a plan and stick to it for getting out of debt.

The Steps
1. Analyze your financial situation. You must know exactly how much you owe and how much money you bring in. These are the basics of your finances, but the most important part of your analysis is to uncover exactly how you spend your money. This requires tracking spending for a period of time so you can see exactly where every dollar goes. This will be very enlightening because much of our money is simply blown and we have no idea where it goes.

2. Prioritize your debts. You need to pay off smaller debts and high interest debts first. Financial gurus have their own opinions of which should come first but you can choose whichever plan of attack fits you best. However, while you continue to make your minimum payments on everything else, attack one bill intensely until it is completely paid off. Close the account. In fact, you can close most accounts and continue to pay them off.

3. Take on no new debt. Resolve to pay in cash as you go for everything or choose not to buy it. Many of us use our credit cards as an emergency backup in case something comes up. However, by creating an emergency savings fund, you can take care of such things without the use of a credit card.

4. Create a budget and live by it. By knowing your entire financial situation, you can plan for what you need. Remember to put a little fun money in the budget, so that your plan is livable and not complete torture. Continuing to track your spending is a good way to stay on budget.

5. Shop the sales. There are many ways to save money when you are trying to eliminate debt. Planning your menus around whatever is on sale is a great way to start. Use coupons when you shop.

6. Avoid eating out, except when it is planned.

7. Buy clothing at the end of the season, when prices are rock bottom, for the following year.

8. Swap services with friends and others rather than paying for them. This is great for babysitting, house cleaning, hair cuts, home repairs and much more.

9. When it comes to big purchases like furniture and cars, save up and pay for them in cash. For many people this seems unrealistic however, if you adjust your expectations you will be able to achieve this. Keep your present car as long as possible after it is paid off. Continue making "car payments" to a savings account. When the time comes to buy a car, choose one that costs what you can afford.

10. Earn extra money to apply to debt reduction by getting a second job, starting a small home based business or selling things you have around the house.

By chipping away at debt and following these 10 guidelines for your finances, you will be well on your way to living debt free. It is not something that will happen quickly for most people. However, just remember how great it will feel when you owe nothing.

Debt Secrets
Learn the debt secrets credit card companies don't want you to know.