The Freedom of a Debt Free Life
A debt free life, is that even possible? I am here to tell you that it is. It may not be easy and it most likely won’t happen right away, but the possibility is out there. To begin your journey towards a debt free life, why not start today, even right now.
Where to begin
If you would like to become debt free it is important to make a plan. In order to plan you need to know where you are at. Make a list of all of your debts. Everything from your mortgage and vehicle loans to your credit card debts and line of credits, even payday loans or any money you may have borrowed from friends or relatives. It is important to know how much you actually owe in order to see the big picture and figure out how you are going to tackle your debt. Some debts such as a mortgage or a vehicle loan are actually ok to have. You need housing, you need a vehicle in order to get yourself to work. These types of debt are not a bad thing as long as they are debts that you can actually afford. If your financial situation changed since you qualified for one of these loans, it may be a good idea to consider a downgrade in order to make the dollar amounts fit into your new budget. If your debts are out of control, now might be a good time to seek debt help. If you have multiple credit cards or unsecured debts it may be wise for you to look into debt consolidation.
Your Budget
In order to make a budget, you need to first figure out how much money you bring in every month. This way you will know what you will be able to spend each month without going into deficit. Once you know what you bring in each month you can create your budget. Look over your last 3-6 months of spending to figure out what you normally spend your money on. Then decide which of these items are needs and what items are wants. Start with the needs category and make a list. Make sure to include your mortgage or rent, housing expenses such as electricity and hydro, all of your vehicle expenses, insurance, food and clothing. Subtract your needs list from your total net income to find out what is left. From the leftovers you now need to decide how much to put towards debt, savings and your wants list.
The more you pay the quicker the debt goes away
Try to put as much as you comfortably can towards your debt each month. Be careful to not cut yourself short though as you could fall into the trap of borrowing to make it to your next payday. It is a good idea to keep making your regular payments on things like a vehicle loan and start putting your extra money towards high interest debts such as credit cards until those high interest debts are paid off. Once you have paid off your unsecured, high interest debts, work on the smallest debt first and then the next smallest until all of your debts are taken care of. This could take years of work, but it will be worth it in the end.
What if there is no extra money or the end is too far out of sight?
If you look at your finances and it just seems like there is no end in sight, it doesn’t hurt to seek debt help. 4 Pillars has helped many clients eliminate up to 80 percent of their debt. We help our clients eliminate debt, rebuild their credit and get their finances back on track.
If you would like more information or would like to sit down with one of our 4 Pillars Medicine Hat Debt Experts and learn about the options that are available to you, please give us a call at 403-332-7361 to set up a free consultation.
