How To Become Debt-Free As Quickly As Possible

Whether it’s your car loan, home loan, student loan or credit card bills, living in debt isn’t easy at all. The cost of debt isn’t just limited to some grands that need to be repaid but also the mental and emotional stress that is probably keeping you awake at night. Living in debt is probably the hardest thing you have to go through as it affects every aspect of your life. You find yourself compromising on the lifestyle you wish to live because a part of your income has to go towards paying off those monthly instalments.

Even though I have never been in a position where I had to take loans, I have seen many of my close pals and family members suffering solely because they are buried under debt. I still remember how a friend of mine lived on pennies during the three years he had to pay off his education loan. Though I sometimes felt helpless seeing him live like that, a part of him absolutely hailed him for the determination he had to become debt-free.

Debt feels like an emotional and mental burden that stays with you until you have repaid every last penny of it. And when you are living in a pile of debt that seems too much to handle, all you wish for is to be debt-free as soon as possible. But here’s the thing: If you are determined to pay off that debt at the earliest, all you need to do is get your priorities straight and form a plan of action that you would stick to until you are debt-free.

Here are 11 Tips to get you started on a debt-free life:

1. Set your financial goals, long-term as well as short term

You must never hope to pay off your debt without having a set of financial goals in mind. Goals, be it financial or personal, give your life a purpose and help ensure that you live in an organized way. Your journey towards a debt-free life should always start with a goal that you wish to achieve in a stated time period. For example, if you are sitting on a debt amounting to $1,00,000 and your goal for the next 15 years is to repay it and have $1,00,000 saved for your child’s education, you should be saving around $1,200 every month to meet that goal. Anything more than that is a bonus. Now that you know what your goals are and what you need to do to achieve it, it’s on you to design every aspect of your life to meet that goal.

Financial goals are absolutely essential to living a debt-free life. Where do you see yourself standing next month, next year and five years from now? You need to have an answer for these questions in order to get started on your journey to become debt-free. Setting financial goals helps you establish your priorities. Once you get your financial goals in place, everything else needs to work around the same.

If you’re sitting on a hundred grand of loan and your goal is to be able to repay 10% of it by next month, every aspect of your life should revolve around that goal until you achieve it. Give up eating at restaurants for a month. If need be, resort to bulk buying the necessities to save every penny that you can. Take public transport instead of driving yourself to work. Remember that every short-term goal that you set out to achieve will help get your long-term financial goals in order.

Similarly, if saving enough money for your child’s higher education is what you want to achieve in the long-run (besides repaying the debt), stop spending money on things that can wait or resort to inexpensive options. Buy a two-wheeler instead of a car or postpone purchasing a household item you don’t need immediately. Whatever your goals are, it’s important to never lose sight of them to have a better financial life.

2. Make a budget and live by it

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