avatarCharlene Ann Mildred

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Things I’ve Learned at No More Debt

Freedom

Photo by Mikhail Nilov from Pexels: https://www.pexels.com/photo/man-couple-people-woman-6963039/

I know a lot of people who are new to No More Debt. They’ve just started the program and are excited about their future. They’re making plans and changes but have yet to get far into their debt-free journey.

And that’s okay.

That’s normal.

I went through this myself when I started my blog and content creation business with much less at stake. But I also realized that there’s something extraordinary about being on this side of the spectrum — once you have been in debt for so long, it can be hard to remember what it was like before that time came around. So here are some things that I have learned along my journey out of debt.

Paying off my debt has made it easier to avoid getting into debt.

Sometimes you don’t control the situation, and things happen. If you’ve been through a job loss or medical emergency, it’s not your fault that you’re in debt. But there’s a difference between being fiscally responsible for oneself and getting into debt on purpose.

If I were to go back ten years and tell my younger self what I know now about how much money I could save by paying off my student loans early, she would be blown away. She wouldn’t believe me, and neither will many people who haven’t been through it themselves yet.

You can only get out of debt with budgeting.

Budgeting is the first step to getting out of debt because it helps you see where your money is going and what you can afford. It also helps determine how much money to save, which will be very important when we discuss paying off loans or other forms of debt.

Once you’re in debt, getting even deeper into debt is easy.

Once you’re in debt, getting even deeper into debt is easy. The reason is simple. You have a credit score that tells people how good of a risk they take when lending or offering you credit cards.

The higher your credit score and the more positive information on your report, like no late payments, the better your chances are at getting approved for loans and other types of financing with favorable terms and at lower interest rates than those who don’t have such glowing reports.

If this sounds like something worth pursuing, then go ahead. But if not, think twice before applying for new lines of credit until this debt-free thing has been accomplished.

Photo by Mikhail Nilov from Pexels: https://www.pexels.com/photo/man-couple-people-woman-6963909/

Most people have more money than they think they do.

The first step to getting out of debt is realizing that most people have more money than they think they do.

The best way to determine how much money you have is by looking at your income and expenses. Do this every month with a spreadsheet or some other method that works for you. Include all sources of income salary, freelance work, side hustles, and so on. Also include all recurring expenses, rent, mortgage payments, utilities, electricity, gas, Internet service, car payments, credit card bills student loans. And anything that comes out automatically each month.

Then compare these two columns, income vs. expenses, and see what’s left over at the end of the month. This is your surplus, and it may be enough to pay off any debt right now if only we could tap into it without cutting back on spending too much.

You need to pay attention to your spending.

More than budgeting and tracking your spending is needed. You must also be vigilant about staying on track. If you’re not paying attention, you’ll be in debt again soon.

Not all debt is bad.

If you take on some debt, it’s best to do it for things that will help build your wealth. Good debt can be used for a home purchase or education, for example, and even starting a business. Bad debt, on the other hand, represents purchases made with no intention of paying off quickly and sometimes not at all. This could include everything from gambling debts to payday loans and credit card balances above what you can afford to pay each month or even just buying stuff you don’t need because it feels good at the moment but won’t benefit your future life goals.

I learned this lesson after falling into bad financial habits before being introduced to No More Debt. I would charge up my credit cards with things like clothes and electronics without thinking twice about whether I could afford them later. As a result, my payments always needed to be on time. Eventually, they led me into deep financial trouble when my accounts were maxed out due to high-interest rates charged by retailers who don’t care about helping people escape their burdens.

Getting out of debt is much easier when you put your mind to it.

You can do it.

I know it’s hard to believe, but the fact is that you have the power to change your financial situation and get out of debt. It will take time and commitment, but if you stick with it and make a plan for how you’re going to go about doing so, you’ll get there.

It helps if you find an accountability partner or someone who will check in with you regularly on your progress toward reaching your goals. This way, if something comes up like an emergency and causes things not to go according to plan for a few weeks, months, years, or however long, then at least someone else knows what happened instead of just disappearing into thin air because no one noticed them gone until much later down the road when they finally came back around again asking questions like “how did we end up here?”

It would help if you made minor changes in your habits, like tracking your spending and paying off your highest-interest debts first. Once those items are paid off, you can move on to others.

Thanks for taking the time to read. I’d like to hear your perspective.

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Life
Debt
Freedom
Financial
Budgeting
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