How To Become Debt Free - Simple Budget Solutions

Do you want to know how to become debt free? 

Are you one of the millions of Americans, who have come to see the American consumer culture as being toxic to budgets, and to lifestyles? 

Are you ready to live a life in balance, with your finances? 

This article will show you how to become debt free.

How to become debt free, begins with taking stock of your current assets, and liabilities. You may be shocked to find out just how much you owe, and just how little of value you own. With the recent declines in the housing, and stock market, a good percent of  Americans now owe significantly more than they own.

Once you’ve taken a personal financial inventory, the next step in how to become debt free, is to make a budget. A budget often means making painful choices between what you want, and what you need. 

There are some things that are non-negotiable. Unless you are prepared to give up your home, making the mortgage payment is a necessity. If you want to become debt free, making payments on credit card debts, medical bills, and any other bills are mandatory.

Then there is the category of necessary, but with discretion. Any number of lifestyle choices fall in to this category. For instance, it is necessary to eat. But, it is not necessary to eat out. It is also not necessary to buy expensive pre-packaged foods, at the grocery store. By taking stock of the amount of money, that you need to spend, to get healthy, well balanced, but not extravagant meals, you can begin to live on a budget.

Another item that falls in to this necessary, but with discretion category, is utility bills. Using fans instead of the air conditioning, and space heaters instead of central heat, you can lower your utility bills dramatically. You don’t actually need 150 cable channels – the basic package, or no package at all, will do. While cell phones have become a necessity for emergencies, it is not necessary to have the maximum plan, with unlimited text messaging. Learn to do without.

Then there are the things that are not necessary. These things make life nice, but they are not essential to living. For instance, travel can be fun, and life enhancing, but it is not necessary. One of the steps in how to become debt free, is to take a hard look at the lifestyle choices you make, and determine that you are going to cut out some of the luxuries, for the time being.

If you want to know how to become debt free, there is a simple three step formula. First, pay for all of the things that are absolutely, positively necessary. Second, pay down your debt. Third, put aside some money for emergencies, so that an unexpected expense won’t knock you back into debt. Only then should you start spending money on luxuries again.

And that’s how to become debt free.

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Debt Free Management - Get Your Family Out Of Debt And Keep It There

Debt free management, begins with a series of steps, designed to keep a family out of debt, and keep them there. We’re coming to the end of the free, and easy consumer culture, and making some hard choices about how much we’ll spend as a society. Much of this has been forced on us, by the drying up of the credit markets. But, there’s also a sense among families, that they want to engage in debt free management.

The first step in debt free management, is to make a listing of your assets, and liabilities. Hopefully, you won’t be surprised by what you learn when you make this list, but many families are shocked to learn just how little net worth they have.

Next, you need to make a budget. The budget should cover the essentials, including debt payments. It should have a certain amount set aside each month for a rainy day. Only with whatever you have left over, from your essential payments, should you use to buy non-essentials.

The key to debt free management, is to realize just how little falls into the category of “essentials”.  If you have a home, and don’t want to move, your housing payment is an essential. Many home owners are not in a position to move, because they owe more than the home is worth.

There are other things that fall into the category of “essentials”, but there is some flexibility in the budget. For instance, calculate how much you are spending on food, including groceries, and meals that you are eating out. Most families can cut this amount in half, by giving up restaurant meals, and pre-packaged foods, at the grocery store. You will probably find that you actually eat healthier meals, on a slimmer budget.

Other things to look for in this category, include the amount you are spending on utilities, cable, and cell phones. While you need some level of each of these, you may find that there is a lot of waste. Tell your kids that they have to stop texting, and cut the plans, so that you use cell phones, for only the basic necessities of life.

Make sure that you include debt service payments, in your essential payments, as the whole goal is to get out of debt. In fact, this is one area where you should splurge. Try to pay double on any revolving credit payment, and at least $100 a month extra towards your home mortgage. When you get a bonus at work, a tax return, or a gift of money, consider putting half towards the debts you have.

The next step in debt free management, is to put something away for a rainy day. Too many people get in to trouble with debt, when something goes wrong. Even with health insurance, an unexpected medical emergency can cost you thousands of dollars. An expensive, but necessary car repair, can send you back into credit card debt, if you don’t have a savings cushion.

Finally, if you have anything left, you can use it on the non-essentials. Recognize that when you adopt a debt free management budget, that there probably won’t be much to go to this category at first. You will see a diminished lifestyle at first. There won’t be any trips for a while. You’ll have to live with last year’s clothing style, and any new clothes will be bargain basement, or thrift store. Eventually, though, you will actually have more money for extras, as you won’t be paying on high interest rate debt.

If you are considering a debt free management budget, recognize that there will be sacrifices at first, that pay off over the long run.

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Be Debt Free Today - Budgeting Solutions For Personal Finance Dilemmas

Do you want to be debt free today?

If you have the money in the bank, of course, you can pay off all of your bills. However, for most of us, being debt free today, is more of a mentality than a reality.

Being debt free today, means no mortgage, no auto loans, and no credit card bills. It means that everything you earn goes into your pocket for spending this month, or for saving for the future.

In today’s consumer culture, that doesn’t seem likely for most people. In fact, most Americans dig themselves deeper in debt each, and every month.

But, if the current economic slow down has shown us anything, it is that we have to become more responsible consumers.

People bought bigger houses than they could afford, assuming that the housing market would rise forever. They thought that when their interest only loans ran out, and they would have to pay the principal, they would just refinance at a new, lower rate. They were wrong, and they have suffered foreclosures in massive numbers, as a result.

But it is not just the home market, where irrational exuberance took hold. People went out, and charged up debts like there was no tomorrow. In fact, after the 9/11 attacks, President Bush even encouraged people to go out and spend, to show that the terrorists couldn’t damage our economy.

He passed stimulus bills, which just put the debt burden on our children. He gave us money today, which our children, and grandchildren, will pay back with interest.

Perhaps that was necessary given the environment we were in, but now it is time to look at other options. In short, we should look at being debt free, today.

The first thing you should do, is make a budget on two pieces of paper. The first page “A” should include all of the things you have to pay. Be judicious on this page. The “A” page should include non-negotiable items, such as your house payment, credit card loans, car loans, etc..

You will also include the things you absolutely need on the “A” page. For instance, you have to have food to live. But, how much do you have to spend on food? In reality, you probably can find ways to feed your family on a lot less money. Eating out is not an “A” item. Steaks are not an “A” item.

Clothing is another area, where you can save money. While you need basic clothing, thrift store prices find their way into your “A” budget, whereas designer jeans go on the “B” page.

Your “B” page includes all of the extras. You may find that there’s not a lot left over for the “B” page at first, when you are trying to live debt free, today. But, over time, you will find that you can afford more things on the “B” page.

When you get a bonus at work, you can add it to the items on the “B” page. When you get a tax refund, it can go to “B” items. Any increases in salary, or second jobs, can fund “B” projects.

Or, you could use some of the extra money, to try to eliminate some of the bills on your "A" page, to help you to attain your goal of living debt free, today, much faster. As each bill that is eliminated, gives you more for the items on your "B" page, which would help you feel less guilty for spending the extra money on luxuries. You will be able to enjoy the luxury spending much more, if you truly can afford the luxuries. I know that this will not be easy to do, especially when we live in an instant gratification world now, but the rewards will far out weigh the sacrifices made, when your goals are finally reached.

If you are serious about living debt free today, you will take a careful look at your budget. You don’t have to buy into the consumer culture that plagues America. You can chart your own course. In other words, you can be debt free, today.

What Would It Mean To You To Become Debt Free?

What Would It Mean To You To Become Debt Free?

Would it give you a sense of relief, and freedom, that you weren’t living with a figurative gun to your head?

Would it mean, that you could easily spend your available money, on the things you needed, and wanted, without guilt?

Think about what becoming debt free, would mean to you.

Keep that image in your head, of what becoming debt free would mean, because you are about to make some hard choices. If you don’t keep the freedom image in your mind, you may want to give up, when it seems that you are the only person you know, who is not going on a cruise this year, or who doesn’t upgrade to a 60 inch plasma television.

We live in a society, where we buy now, and pay later. Unfortunately, that has lead to a situation where everyone is in debt. The recent constriction in the credit markets has meant that people who used to be able to get easy credit, are having to tighten their budgets.

Becoming debt free, starts with taking stock of what you have, and what you owe. Your first order of business, is to start living within your means.

You must make the minimum payments on your debts, as well as provide food, shelter, and clothing for your family. There are other essentials, such as transportation, and utilities.

But within each of these categories, there are ways to cut the fat out of your budget. For instance, most families could half their food budget, just by cutting out the restaurant meals, and pre-packaged foods, at the grocery store. Sure, this means actually cooking homemade meals. But I’ll bet you find that the meals you make at home, are far more nutritious than the ones you’ve been eating. And, they’ll keep you within your budget, too.

While cell phones are certainly a necessity today, having the package with unlimited calling, and texts is not. Having cell phones for emergencies, and quick calls is one thing, having cell phones as an appendage to the ear, is another.

Even utility bills can be slashed, if you are willing to open the windows, use fans, and cut the air conditioning in the summer, and use space heaters, and wear sweaters instead of central heat in the winter. These choices are smarter for the environment, as well.

Will you feel some measure of loss, and the pain of not wanting to sacrifice the luxuries of life, while becoming debt free? That is inevitable. Your kids may not quickly adjust to their new, more Spartan lifestyle. They may not understand why you’re no longer handing them $20 when they want it.

But, over time, you can teach them good habits about how to handle money matters, in a more responsible way. You can show them with your own actions, that being financially responsible, is emotionally a healthier choice. By compensating for “things”, with quality time with them, you will win them over.

So, keep in mind, what becoming debt free, really means to you. It will make the hard choices you are about to make, seem worth it all.

Welcome to my blog, dealing with all money matters

My name is Sharon Hall, and I want to welcome you to my blog, dealing with all money matters. My mission here, is to provide an education on how our mindset regarding money affects our financial abundance. To provide you with vehicles, for you to attain the total financial freedom, that we are all looking for, want, and desire, with all of our hearts for ourselves, loved ones, and our friends.

My hope is that everyone will find some value here, and will apply what they learn, so that everyone will attain true prosperity in their lives, and to share what they learn with others, so that they may be able to do the same in their lives.

May all of your wishes, and dreams come true for you in the very near future. Just believe it is possible, and take massive action. Without massive action to attain your dreams, nothing will ever change in your lives. So go out there, and get what you want, and deserve.