There is no getting around it. Debt is a massive weight on our shoulders, and Debt can be soul-crushing and stress-inducing. And whether you owe money to the bank, a credit card company, or a family member, it can feel like there is no way out of this dark tunnel. Like being Debt free is an impossibility. But guess what? It isn’t. There is a way out.
And there are steps you can take – specific steps – that can take you from unhappily in Debt to living a life of financial freedom. In this article, I’m going to show you how people like you took actions that allowed them to reduce and eliminate their Debt faster than they thought possible.
6 Steps To Pay Of Debt Fast & Live Debt Free
And, if you take the same actions before you know it, you’ll be where they are! So without further ado, let’s jump in!
#1 Start Tracking What You Spend
The first step of your debt free journey is to “Start Tracking What You Spend.” To keep track of what you spend each month, write it down. Take your monthly bills, for example. It would be best if you tried to do it every day for a month. When you start breaking down your costs, it may seem like a lot of work. But keep going. Always remember why this is important, and find a way to do it quickly.
You’ll be more likely to stick to it and pay more attention to how much you spend. Another reason you should track your expenses is that it helps you stay on your spending plan.
After you make a budget, you need to keep track of your daily spending to stay on track. If you don’t keep track of your money, you won’t know when to stop spending on things like food or clothes. And at the end of each month, look over what you spent and compare it to what your budget said you should pay.
If you’ve spent too much, look for places where you can save money. If you didn’t spend enough, on the other hand, you might want to save more or pay off your debts. In either case, you should use what you learn from keeping track of your expenses and any changes in your life, like getting married or having a baby. Make changes to your budget for next month that will make you better off financially.
#2 Live Within Your Means
The second step is to “Live Within Your Means.” Being responsible with your money is good for your health and your money. To “Live Within Your Means,” your monthly expenses should be less than or the same as your monthly income. Many people find it much easier to say than to do.
You can buy more things than your income typically lets you with credit cards, loans, savings, and emergency funds. Unfortunately, you can’t keep living like that, and your spending will catch up with you at some point.
Learning to live on less than you will keep you from going broke and give you the peace of mind that comes with being financially free.
#3 Control The Content That You Consume
The third step is to “Control The Content That You Consume.” It’s up to you to decide what content you want to see. This one also has two parts. Step one is to watch a lot of YouTubers.
I became obsessed with Dave Ramsey, Graham Stephan, CNBC, Millennial Money, and much more. I also loved spending hours on Reddit threads about F.I.R.E. (Financial Independence Retire Early) movement. Not only did it help me learn about personal finance and normalized the kind of life I wanted to live one day and how to be financially responsible.
I am someone who is easily influenced. I think I absorb the conversations I’m in and the content I’m consuming. As the saying goes, “Wisdom is the accumulation of experience.”
#4 Stop Watching Distracting Content
The fourth step is to “Stop watching content that can distract you from being Debt free.” It would be best if you didn’t watch things that might take your mind off getting out of Debt. I unsubscribed from every fashion-related Instagram creator or influencer because everything was about things you should buy and the latest trends you should be wearing.
If you are also influenced by the conversations you hear in the content you watch, put yourself in situations where you can watch content that will help you along your journey.
#5 Increase Your Income
The fifth step that can help us to be Debt free is to “Increase Your Income.” Getting out of Debt can seem like it’s all about managing your spending and cutting costs, but making more money is also a big part of getting closer to your financial goals.
People want to make more money for many reasons, such as to get out of Debt, save for the future, have a safety net in case of an emergency, or live more comfortably. There are many ways to make more money, like getting a new certification or starting a side business.
#6 You Must Not Give Up
The sixth step is “Don’t Give Up! Stay the course!” Do what you have to do to keep going. There were times in our journey when we fell off the wagon or had less intensity and focus and just indulged in some things. I don’t look back and regret those times because that’s what I needed to do to stay motivated, but I wish I didn’t fall so hard sometimes. It’s a long road, so it’s essential to keep that in mind.
On the other hand, the faster you pay off your Debt and the more severe and focused you are about it, the quicker you can get out of Debt and have financial freedom.
Understand Personal Finance
Personal Finance can be as simple as doing the math to see what will help you reach your financial goals the most, but that misses the point: Personal Finance is about you. Finding peace of mind by getting out of Debt is more important than math.
If you want to be debt-free, there are a few steps you can take:
- Figure out how much you owe
- Choose a way to pay down your Debt
- Make and stick to a budget
- Come up with a plan to stay debt-free once you’ve reached your goal.
Each step in this article can help you on your debt-free journey. But did you know there is a specific method to reduce debts that, if combined with what we just covered, can help you pay down your debts even faster? There are two methods, and I get into all the details in our previous articles, don’t forget to check them out.