5 Simple Steps for Debt Free Living

Income – Expenses = Savings, this is the formula most of us follow in life but the bare fact to have a debt free living should be Income – Savings = Expenses. The urge for more is what results into piling up on our credit card payments, loans and all other tempting money lenders.
Once entangled in debts, it is difficult for you to push your way out. Debt free living is very much possible but for it to happen, you need to think, calculate and act upon strictly and sincerely. It is an effort which can only succeed if you plan and implement accordingly. Now the question remains how?

The five simple steps to a debt free living are as follows:

1. Ask Why And Then Buy: The shopping spree which is common in many is one of the major reasons why you end up paying all what you earn. Whenever you go for shopping, listen to your head and not the heart. Analyze the need for buying every time and then go for it. This may seem difficult initially but over a period of time can make a huge difference in your bank account.
2. Embrace Your Goals: Each and every one of us has financial goals but then the question is why we are still unhappy. The reason is that we do not stick to our financial goals and change them from time to time. Break your goals into short term ones and long term ones. Short term goal should include minimum savings every month and paying of your credit card or loans. Eventual goal should be to own an asset, or go on a vacation without debts.
3. Goodbye Credit Cards: Tempting well defines a credit card. Most of the time we end up in debts just because we have credit cards. Lit bit of math will help you understand how you are actually paying more than what you have bought for. To your surprise, you will find that you are paying 24% in APR interest alone. Being a credit card defaulter is even more dangerous and can stretch your road to a debt free living.
4. Secret of Financial Freedom: The fourth simple step requires you to do budgeting. This way you are accountable for your income and expenses. Write down your income on regular basis, be it salary, social security checks etc. and record your expenses as well.  Doing this on a monthly basis, will help you cut down on your unnecessary expenses. Eventually, the realization to balance out on your credits and debits will lead to a debt free living.
5. Reward you’re Efforts: Motivation is what gets you going. Pampering yourself for the small achievements will help you achieve the big ones. Cut down on snacks for few days or brown-bagging for a month, then it is the time to treat you either by buying lunch or a cappuccino. These simple but meaningful rewards could be another reason for you to work hard for accomplishing your long term goals for debt free living.

By following these five simple steps, you are going to enjoy debt free living.