• Tue. Sep 28th, 2021

    Financial independence

    Your journey to Financial Independence

    financial independence

    We all want to get out of debt, but it can seem like a long, hard path to financial freedom.  In fact, it is not difficult as long as you follow a few steps and remain dedicated to the goal.  Here is a list of ten tips that will help you find your financial independence.

    1. Make a new different debt Budget

    Family budget

    This is new from your regular budget.  Your regular budget will tell you how much money you owe after paying all other expenses, and the debt budget will tell you how much you owe and how much you owe for each debt.

    Transfer your surplus from the total budget to the shop budget.  This is the most important money you have – it is the money that gives you financial freedom.

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    Next you need to itemize all your debts in the order of the highest interest to the lowest interest you can pay. 

    Pay the minimum amount required by everyone other than the highest interest rate debt – this is the only time you have to make the minimum payments. 

    Keep doing this until the high interest debt is completely removed.  Once this is done, put 100% of the money you spent on that loan into debt with the next highest interest rate;  Keep doing this until all your debts are paid off. 

    This creates a snowball effect and you will be amazed at how quickly your debt goes down.  This is a great motivator for people who are working to reduce debt. 

    You need to remember to do this in conjunction with item 3 (convert high interest loans to lowest interest loans where possible).

      Once you have paid off all your debts, start investing the entire amount of your debt payment money into savings and deposits.  You already live without money – why not keep doing it and save something special.

    2. Budget


    First of all, this budget will include all your income and all your expenses, but it will not include any of your debts – they will go to your specific store budget (see item 1).

    This budget should list your total income, total go-goings, and total surplus.  As part of this budget you should include the necessary expenses and money (item 7).

    It is essential that you stick to this budget – this is your lifeline.  If you are not honest when creating this, everything will fall apart within one or two pay cycles.  Include all costs.

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    3. Credit cards

    Credit card

      Credit cards are a great tool to help you get out of debt.  If you have a low interest rate credit card, consider switching to a higher interest rate loan (or as much as you can).  The interest profit seems to be low but every penny counts.

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    If your cards have been used to the fullest, the first thing to do is to cut them.  You will not use credit cards on this plan (if you need one for major internet purchases, get a prepaid credit card).

    4. Lower expenditures

    Reduce expense

    A moderate life is very rewarding.  Not only do you save money, you learn a lot about survival and self-care.

    There are some very simple ways for you to reduce costs.  For example, you can probably go to town twice a week – reduce it to one night and enter the other night – you can still enjoy, but you will not pay the bar price for alcohol.

    If you are always buying branded goods in the market, start buying generic – you can save a lot of money by doing this.

    You should also consider buying in bulk as buying in bulk is always cheaper.  Keep an eye out for good deals and coupons.

    While this may seem like a daunting task, you will find that you want to live like this because of the many rewards that come from exercising your brain in looking for ways to reduce costs.

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    One of the most beneficial side effects of this (which I personally have experienced) is that you can significantly reduce the amount of mess you produce by buying only what you need and buying in bulk.

    It’s like a game.  As I follow this plan, I find myself trying to reduce the amount of money I spend each week.

    The less I spent, the better I lived (as a result of home cooking and pride in my efforts).

    Don’t buy pre-packaged or prepared food – you don’t pay a lot of money.  You should be aware that the price of some meats, such as chicken, can go up significantly when buying skins and bones.  It does not take much time to do it yourself

    Merge loans

    5. Merge loans

    Unless you are deeply in debt and unable to make minimum payments on all your loans and cards, you should definitely not get a consolidated loan.

    If your debts are too bad to bear, you may have the only choice consolidation loan with less bankruptcy.

    Make sure you are shopping and getting the lowest possible rates.  Since this term will be part of your debt budget (item 1) you should try to reduce this term and pay off your debts as soon as possible.

    6. Stop saving


    Stop saving until you are no longer involved in debt. In fact, if your savings have been set aside, the entire amount should be transferred to your debts immediately.

    By reducing debt at high interest rates, your savings account will produce much lower interest rates than the money you save.

    Here is a very important example:
      Savings% 5%: $ 10,000 (Total interest earned in one year: $ 500)
      Credit Card!%: $ 10,000 (Total cost of one year loan: 100 2,100)
      By including $ 10,000 in your debt, you save up to 100 2,100 in interest costs over $ 100.  It would be foolish to leave your money in a savings account.

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    7. Only pay self


    It is very important that you pay for the money you spend on each pay cycle.  If you try to avoid this area, you will violate your budget and undo all the good work you have achieved.  This does not mean that you should not try to cut costs, it is also very important.  When working with your “play” money, be sure to include everything you normally spend money on.  If you give up something, you can ruin the whole budget.

    8. Expand Your income

    Boost income

    While this is not always possible, you should definitely try to increase your income (albeit a small amount).  The more money you owe, the faster you will get rid of it.  You can take a part-time job in a supermarket, a fast food restaurant, or a neighborhood that offers to do weird jobs.  A variety of part-time jobs are available in all areas.

    9. Stop paying too much


    10. Deal with fact


    Be appeased with what you have.  You will not be able to spend money on pleasures for the next few months.  It is very important to be able to resist the amazing things that we all want to achieve.  If you’ve always wanted to buy something new, it’s very difficult for you to stick to the tips on this list, which can lead to failure, and worse, more debt, if you can not be satisfied with what you have.  Chances are, shopping got you into this crisis first, so dive into it now.  You should definitely stop getting new debt.

    Before you go any further, you need to work out exactly where you are sitting, what you owe, and to whom you owe and the interest rates you pay.  This information will be very helpful in the rest of these tips.  It is easy to think of all our debts as small debts, but when you add them all up they are the equivalent of a huge debt. 

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    This is a very scary job, but unfortunately it has to be done.  If you need to, get a friend or family member to sit with you to help you get through the old bank statements.  Once you’ve done this, the good news is that the hard part is over.  You’re in debt, and now it’s time to kill.

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