If you have ambitions for retiring early or becoming financially independent, then debt could be one of the biggest things holding you back. Any plan for your financial future should include ways to reduce your debt, aiming to erase and end your debt completely. While not always easy, clearing your debts for good can teach you a lot about frugality and budgeting, setting you up perfectly for early retirement.
End Your Debt For Good
Start your journey to becoming debt free with these top tips.
Make a vow to borrow no more
When credit is available to you, the temptation to use it will always be there. One of the first steps you should take to being debt-free for life is to reduce your limits on all credit sources. Reduce them as much as you can so that you can focus on repaying what you already owe, re-assessing regularly to ensure that those credit limits keep coming down. If you still feel that you lack self-control, then cut up your cards. With the option of credit now unavailable to you, you’ll be much less likely to incur further debts.
Set a budget to reduce your debt as quickly as possible
Setting yourself a budget is the easiest and quickest way to help you reduce your debts. A budget can help you to work out what your available income is and how much you can set aside to clear your debts. When you set out to make a personal budget, make sure that you leave some aside for entertainment or treats – this will make it easier to stick to knowing that there are still things to look forward to and enjoy, that will also serve as a reward for sticking to the rest of your budget.
Tackle major issues head-on
When it comes to managing your debts, it’s important that you get a clear picture of the situation you’re facing to help you establish whether it’s feasible and realistic for you to clear them all. If the minimum repayments are too high, or your overall debt amount is more than you can afford to pay off – then you need to consider getting help to tackle these issues before it has a serious effect on your finances. Consulting with debt consolidation companies could help you find solutions for managing your outstanding debts and make them more affordable to pay back. If you’ve got particularly high-interest rates on some of your accounts, this could be one way of paying them back quicker while paying less back overall.
Learn to forward plan
Forward-planning is essential for managing your money better. By anticipating birthdays, weddings and other special occasions you can avoid having surprise outgoings that could reduce your debt repayments. There are many reasons why planning ahead could save you money, with some great lessons you can carry with you once your debts have cleared.
Make a plan to tackle your debts to help set you on the path towards financial independence and your dream of early retirement.