6 Debt Free Packages for the New Year
Unmanaged spending using a credit card is the number one main cause that drives most people into credit card debt. If you are currently in debt and are thinking of having a debt free life in the near future, you should start to look into your debt seriously; avoiding unwanted debt is a great way to manage your finances and relive the stress caused by debt. Here are some debt free steps that you can take according to your New Year’s plan:
1. Change Your Spending Behavior
You cannot become debt free if you spend more than you make. As simple as that! Financial stress relievers are called “money in the bank” or “positive cash flow”. You need to know where your money goes; this can be done by recording your routine and non-regular expenses. Think twice about each item you plan to buy, ask yourself whether it is a need or an optional item.
2. Have Your Budget Plan
Make a budget plan for yourself and eliminate or at least reduce optional items such as entertainment, dinner at restaurants and luxury vacations. Plan your budget according to your financial capacity and spend it according to your budget. You will be able to achieve your debt free goals if you can plan positive cash flow, which means you spend less than what you produce.
3. Pay Your Bills on Time, Every Time
Managing monthly bills is an important part of staying debt free and maintaining a good credit rating. If you experience difficulties, come up with a system to ensure that bills are not paid late. For your current credit card debt, you can get help from financial experts such as credit counseling or debt consolidation services; they have extensive experience in helping people manage debt.
4. Set Your Financial Goals for Long and Short-Term
Changing your shopping behavior may be difficult, but if you set your financial goals, both for the short and long term, it’s easy to make the necessary spending cuts to get what you want. So set your realistic financial goals for 2007 and the next few years; and manage, control, and cut unnecessary expenses so you can achieve your financial goals.
5. Plan an adequate Emergency Savings Fund
You never know what will happen tomorrow, there may be some emergencies that will require an instant amount of money, such as medical bills due to major illnesses and accidents; money to cover income shortages such as temporary job loss. The cost of living without bones for three to six months should protect you from most of these problems. Make savings your habit.
6. Learn to Invest Your Money
Investing can make our money make more money and prevent you from debt. Learn to invest with your money to grow it. There are many investment plans available in the market, from insurance, mutual funds, to the stock market. Investments can make you grow your money; on the contrary, it can cause you to lose your money too. Usually investments with high returns will have a higher risk than investments with low returns. You need to understand your own risk profile and choose an investment scheme that meets your risk profile. You can start learning by taking classes, looking for references to great advisers or starting reading. Do it your way, but do it; and start now!
So, here are some tips for your Debt-Free Package. Wish you have a Happy New Year and “Debt Free”.