How To Become Debt-Free As Quickly As Possible

Budgeting is an important aspect of living a debt-free life. Though you can’t give up food and other necessities to save money for paying off your debt, you can create a workable household budget to make sure that you aren’t overspending or making unnecessary purchases. Having a budget for your everyday needs helps keep your expenses in check. Even though it’s important to eliminate unneeded items from your budget, feel free to make small allowances like a cup of coffee at work or a family movie date once a month so you don’t give up on enjoyment altogether. Budgeting is something that you must do even when you are debt-free as it helps you live a financially organized life besides preventing unnecessary expenditure.

Also, it’s better to save up in advance for big purchases rather than touching the amount set aside for paying off the debt. In order to track my savings for the forthcoming purchases, I use this Savings Tracker that keeps me focused towards achieving my saving goals. So if I want to take a vacation 3 months from now, I will start saving for it right now so that I don’t end up shaking my budget.

3. Discuss your purchases (however small they are) with each other in the family

Many families don’t bother to discuss purchases amongst themselves which is often the reason why they are unable to meet their financial goals. In fact, the tendency to indulge in impulse buying behaviour is most often the reason why many people are dealing with debt and its consequences.

No matter how time-consuming it is, make it a point to discuss with your partner about anything that you wish to buy. This becomes all the more important when the item in question is expensive and can affect your budget. Even if you and your spouse are earning individually, tell the other person if you have been thinking to change your phone or buy a new laptop. Make purchases that fit in your budget and help meet your saving goals.

You don’t want to feel stunned by an unknown video game purchase that your spouse made for your child. It’s important to discuss your purchases to rule out the possibility of ruining your budget. Discussing your purchases becomes all the more important when your family is living on one income and also needs to pay off the debt. No matter how small the intended purchases are, it’s important to discuss them with each other to catch hold of where the money is going.

In my family, we always make it a point to spend at least a few days discussing big purchases like household items and electronics or while planning vacations. We also make it a point to discuss amongst ourselves before giving gifts to someone outside the family to make sure that we don’t end up disturbing the family budget. Though this might sound like a hassle to many, it helps us meet our saving goals and keep the expenses in check. Even though I make my own money and have a personal savings account, I always make it a point to take my mom’s opinion before buying anything that costs more than $50.

You must also maintain an Expense Tracker to track every small purchase that has taken place during the month. It will help you point out the unnecessary purchases that can later be curbed to save money.

4. Live a Frugal Life no matter what

Nothing can help you repay that debt if you aren’t living a minimalist lifestyle that revolves around the concept of frugality. If you are determined to pay off the debt, give up on the lavish lifestyle and stay mindful of every purchase that you make. As someone who has lived on a mere monthly expense of $125 for three long years in an expensive city, I can certainly tell you that the benefits of a frugal lifestyle stay with you for many years.

I know people who relocated from Tier-1 to Tier-3 cities to save money on rent and other big city expenses. A couple of my friends even shifted to smaller homes to be able to save money on rent. Needless to say, it has been an absolute delight to watch my close friends and family walk out of debt because they cared to make some mindful choices that revolved around the sole aim of becoming debt-free.

There is no doubt that frugality is the one thing that keeps you rich and sorted. A small step towards frugality can gradually save some big bucks that can help repay a big chunk of your debt.

Being able to save money on your food bill can be a huge step towards living a frugal lifestyle as groceries account for majority of your spending. Meal Planning is one of the handiest ways to save money on food and prevent food wastage. I always lagged behind in this area as I had no time to plan my meals until I heard of $5 Meal Plan before deciding to give it a go. To my surprise, my food bill has reduced by half without putting in any efforts as the job is being done for me for as low as $5.

5. Live within your means

Being buried in debt points to the fact that you are spending more that you earn. A monthly salary of $5,000 cannot fund a lifestyle that costs $10,000. And if there’s debt involved, you are simply making way for a disaster later on in life. The first step to financial success is to cut back on your expenses and make sure that you aren’t spending more than 70% of your monthly income. Though this may require you to make huge changes in your lifestyle, I promise you that you will be proud of yourself for having managed to save enough money to pay off that hefty debt.

Spending more than what you are earning is the main reason why you will find yourself in debt. Hence, it’s extremely important to live within your means and spend less than what you earn. If you can’t afford to buy a luxury brand, don’t buy it if you want to avoid shaking up your financial life. Living within the means is a habit that we all must inculcate within ourselves, whether we are debt-free or not.

6. Learn to say NO, to your kids and to yourself

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