Be debt free

JANUARY 25, 2015 BY KEMI LANRE-AREMU 0 COMMENTS

   

 

 

Debt feels like a heavy weight that hangs around your neck. Learn to stay debt free with these tips:

Create a strict budget

Add up what you make every month, and then add up your necessary expenses every month which include and are not limited to food, rent or mortgage payments and utility bills. Stick to this budget month in, month out.

If the outgoing funds are more than the incoming funds, you’ve got some work to do. Obviously, you either cut some expenses or make more money.

Cut costs

Learning to cut your unnecessary costs down as much as possible and to stretch every naira will help you stay off debts. For instance, stop going out to eat and start buying cheap bulk ingredients and learning to cook big meals that’ll help feed your family. Fast-food restaurants trick people into thinking its cheap, but a pot of vegetables, rice, and beans serves more people and is healthier than a cheeseburger.

Pay up your debts

Made a little extra money this week? You could blow it all on a night out, or you could put it toward your loans. If you want to be debt free, you have to be strict with yourself. No excess expenditures, until you’re completely debt free and can pay for things without going back into debt. Commit to getting there and work hard until you’re there.

Save anything you don’t spend

If you’ve budgeted appropriately and have some money left over at the end of the month, save it. It’s important to have money saved up for incidentals, emergencies and other expenditures which can sink you down into debt again. Having an emergency fund is absolutely essential to avoiding debt.

Come up with a savings goal

Even if it’s just a little amount of money, saving instead of spending and watching your savings account grow can be a hugely satisfying experience for some people. Make saving more addictive than spending.

Commit to a change in behaviour

If you want to be debt free, you need to freeze all of your inessential spending and avoid buying things that you can’t afford. If you can’t pay for something in cash now, you don’t need it. Commit to the process and the journey of remaining free of debt and enjoy the freedom that it brings. Being debt free doesn’t mean living like a miser. If you want to spend a little on vacation or splurge a little every now and then, feel free to go for it. Just make sure that these kinds of expenses on fun come from a monthly income that’s in excess, not being charged on accounts that are already swollen beyond capacity.

Keep saving

For every pay cheque put aside some money for bills, food and other needed necessities of living, as well as some money aside to save. Also put aside a little money for non-necessities. It’s important to be able to buy things you want without going into debt.

Live within your means

For many people, debt happens because we think we deserve a certain quality of life. Why don’t we deserve the expensive cars, the fine jewellery and the fancy vacations that other people can afford? This kind of thinking is how people get sunk into heavy debts they will struggle for their whole life to pay off. Learn to be happy living within your means, and take pleasure in every naira you save.

Stay healthy

Medical debts quickly sink financially secure people. You need to eat well, exercise, and maintain proper dental health to avoid costly and unexpected expenses that come as the result of health scares. A single trip to the hospital can bankrupt people who aren’t prepared for it.

SOURCE:PUNCH.