Here’s how to become debt free in four simple steps:
First, you need to assess your current financial situation. It’s kind of like going to the doctor for a physical exam, except this time you’re examining your outstanding loan balances, your monthly income, your monthly expenses, etc.
You need to have a clear picture of how much you owe, how much you make, and how much you spend. This will tell you how bad (or how good) your financial situation is.
Second, you need to look for ways to trim expenses. Some of the best expenses to cut are those that are a) frivolous and b) recurring. Frivolous expenses that get auto-charged to you every month need to be eliminated if you truly want to become debt free.
Look also for ways to save money: on your cars, your house, your food, your health, your entertainment, etc. For many families, it is actually quite easy to cut $100 or even $200 in monthly expenses without much trouble.
Third, you need to put together a plan for credit card debt reduction. Depending on your circumstances, you may want to put together a debt snowball plan. Or you may want to seek Christian debt reduction help.
Every situation is unique and there are no one-size-fits-all solutions. So consider carefully what the best course of action is for you and your family.
Fourth, you will want to increase your income. This is the step that is sometimes hardest. But it is the one step that can really accelerate how fast you become debt free.
You might consider starting a side-business. Your options are endless. There are dozens of opportunities for service-based businesses, as well as online businesses. You may also consider taking a second part-time job.
Okay. These four steps cover the basics. Now here’s the secret…
The Secret to Become Debt Free
So far, I’ve given you the four simple steps to become debt free. But I’ve left out the biggest secret of them all.
The secret is consistency.
It’s always easy to get excited about doing something and pursue it with a passion for a couple weeks or even a couple months. The true challenge is what you do when the excitement wears off and you’re tempted to buy some shiny new toy.
Here’s the truth: You can spend 6 months, a year, or even 2 years following your plan to become debt free. But all it takes is one weak moment to erase all that progress.
Similar to the person who loses 10 pounds and gains back 15, it’s easy take 2 steps forward and 3 steps back — and actually find yourself in a worse financial position than when you started!
So consistency is key. But so is the ability to pick yourself up when you’ve made a mistake. Because, honestly, it’s almost inevitable that you’ll make mistakes along the way to become debt free.
The question is: Will you have the resiliency to forgive yourself, get back on track, and keep moving forward? Only you can answer that question.