Do you have credit card debt? Retail store credit? Student loans? Are you making payments on a payment plan to the IRS or for medical debt? These are common forms of debt that people live with. But if you would rather not live this way, you need to start following the good financial habits of people who live debt-free.
Follow a Budget
The top habit of debt-free people is setting and following a budget. When you know what money you have coming in and where and when it is spent, you have control over your finances. And you have control over your debt load. Plan for your incoming and outgoing money by documenting your income sources, fixed expenses, savings, and other expenditures. Set amounts to spend in each category and stick to it.
Control Credit Cards
Another top habit of debt-free people is limiting the number of credit cards they have and how much they use them. Plan to get rid of all but one or two credit cards and use them only for true emergencies. Don’t use retail store credit cards, stop using credit cards, use only cards with the lowest interest rate you can get, and don’t exceed limits. Pay off and close extra credit cards.
Aim to Be Frugal
Debt-free people live below their means. They shop sales, don’t overspend their budgets, do not buy top-of-the-line merchandise, don’t buy on credit, and save for special expenses. Look for ways to save money. Do you always need new shoes? Do you have to eat out every week? Do you shop mindlessly when you are upset? Search out many ways to cut your spending and save money rather than lose it.
Pay with Cash
Paying with cash rather than buying on credit is one of the best habits to get into if you aim to be debt-free. Practice using your bank debit card at the grocery store for your budgeted amount for groceries. Pay the same way at the gas pump instead of using a gas credit card. If your cell phone bill is high and difficult to pay each month, consider getting a prepaid phone to better control your cost.
Budget for Savings
You may have heard the phrase “pay yourself first” and if you want to live debt-free, this is good advice. When you create your budget, make savings a line item and put money aside each week or month. Stay on track with your budget for savings just like for your spending and soon you’ll have a more balanced financial picture.
When you plan to control your finances instead of letting them get out of control, you can get to debt-free sooner than you think. For those times you need an instant cash advance loan to apply for a personal or title loan, consider Tio Rico Te Ayuda for your interim financing solutions.