The debt-free plan you create with this guide will help you get out of debt, become debt free, and keep your finances in control. We’ll walk through creating a plan, tracking your spending, and creating a budget to pay off your debt.
Track Your Spending
Track your spending for a month, then go back and look at the numbers. See if you can figure out how to reduce your spending in certain areas, like coffee shop visits or restaurant meals.
Create a Debt-free Plan
Once you track your spending, make a budget based on this information. A great way of doing this is by creating envelopes with names like “Rent” or “Groceries.” Use these envelopes to track what expenses come out each week or month. When it is time to pay bills at the end of each pay period, they’re already separated into these categories and ready to go.
Reduce Unnecessary Costs
Start by looking at your spending habits, bills, savings, and debt. What are you paying for that you don’t need? Look at all of your insurance policies. Does the same company still cover them? Do they cover the same things they did in the past, or have they changed? Maybe it’s time to shop for a new provider or better coverage if there is something that you no longer need but haven’t canceled yet, cancel it now.
Increase Your Income
One way to be debt free is by increasing your income. A side hustle is one of the best ways to bring in some extra cash, but if you don’t have time for one or don’t want to start something new right now, look into other ways to increase your earnings, for example, looking for a new job opportunity with higher earnings.
Take Control of Your Budget, One Step at a Time
Taking control of your budget means creating a plan for how you will spend your money in the next six months. You will then use this plan to decide where your money goes each month and how much you have left over after paying your bills.
Focus on the Goal
When considering your plan to become debt free, it’s essential to focus on the goal. You can’t be distracted by other things that may get in the way of reaching your goal. Don’t let discouragement or a lack of progress keep you from continuing down this path.
Debt can be stressful, but with careful planning and smart spending habits, you can be debt-free in no time. The important thing is not to lose sight or give up hope on your goal: You can get out of debt. If someone else has succeeded before, there’s no reason why they shouldn’t be able to do so again.