How To Enjoy Life Debt-Free and Worry-Free

To most of us, accustomed that we are to a lavish lifestyle, living free of any sort of debt may seem to be quite impossible. However, many people have consciously made this a choice and have been actually quite successful, irrespective of their backgrounds, social class, occupations and level of income. If you truly want this to be a reality you can explore countless methods of cutting spending that will first help you to eradicate accumulated debt and then allow you to enjoy a life completely free of debt and repayment worries. Depending upon the choices made for a practical lifestyle, you can devise a system that will work for you. It can be truly liberating feeling to know that you can live within your income and enjoy all that life has in store without being forced to take on expensive debt and then sweating it out trying to manage the monthly payments carrying a large interest component. Here are a few practical tips on avoiding incurring of debt.

Build Up Substantial Savings

The best way of staying out a debt trap is not to incur debt at all. The most practical way of not taking on debt is to buy whatever you need with your own savings. So whether you need to buy a refrigerator, get your car repaired or even pay for some unexpected medical emergencies, you don’t have your forehead creased with worry if you can just dip into your savings and pay for it. You should also plan to save for certain events that you can plan for such as college education for your kids, a new car or a holiday with the family. Go about building a pool of savings in a determined way and do not touch it for frivolous expenses. The savings that you accumulate should be channelized into more productive investments such as fixed deposits or even the stock market so that you can get the benefit of higher returns while maintaining a high degree of liquidity. Substantial savings can only happen if you plan how much you will spend out of your monthly income so as to make possible a regular monthly saving.

Settle Credit Card Outstanding Immediately

Though most people advocate that dealing only in cash is the best way of running up a debt, there are plenty of situations on our fast-paced world, where using a credit card may well be warranted for sheer convenience and sometimes, worthwhile savings. For example, purchasing goods online or making hotel reservations on a travel website becomes far easier if you use a credit card. Frequent use of your credit card also enables you to accumulate reward points that can be cashed in later for discounts and bargains. However, what you need to keep in mind is that you need to settle the amount mentioned in your monthly bill in full before the due date and resist the temptation to roll over the outstanding by paying a nominal sum. Rolling over balances is the quickest way of getting ensnared by high-interest debt that you will find difficult to shake off. However, if you think that credit card management doesn’t come easily to you, forget the idea and lock away all your credit cards.

Buy Essentials Only

If you take a close and hard look at the consumption patterns, you will be surprised to discover the amount of frivolous expenditures that we make, often on an impulse. Before buying anything, it is always a wise idea to ask yourself, if you really need to buy that item or are you being tempted just because it seems to be a very good bargain. With a little of thought and restraint, you can really exercise minimal consumerism and learn to have the maximum fun without spending a bomb on each and every item. Remember, such a mindset can be developed only with strict discipline and a real willingness to cut back on an extravagant lifestyle. For running you household, the best way is to make out a detailed budget and ensure that you stick to it.

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