5 Steps to Kick-off your Debt and Achieve Financial Freedom
May 02, 2021
Did the thought of your debt keep you up all night?
Did you wake up feeling stressed today?
Let me know if this is true…
You want to pay off debt, but something comes up, and you’re head over heels in debt.
You realize that debt is the worst poverty, but you don't know the way out of it.
You feel your credit card is putting you behind financially
You feel ashamed, guilty, worried, frustrated, and uncomfortable thinking about your retirement
Let me tell you…you’re not ALONE…it happens with all of us.
According to creditcards.com, an average American credit card debt is about $15,950, while 39% of Americans' debt goes up with each passing month. A study reveals that, on average, a single household in America carries a credit card debt of about $8398. In a broader aspect, debt is not just limited to credit card debt, but it also includes mortgage, student loan, personal loan, and auto loan. A Federal Reserve Board survey shows that, on average, an American student graduates with a huge debt amount of $40 000 as a student loan, and it even goes up to $100,000 for students pursuing higher degrees. When it comes to women, they hold about 2/3rd of U.S student debt which comes out as $929 billion. The figure is insane!
As a single/divorced woman, I understand it can be hard for you to do away with debt when you're an emotional spender. Things like life experiences, luxury vacations, expensive meals fancy you, so you end up living paycheck to paycheck. But here is something to ponder; being drowned in debt can not only handcuff you but can also leave long-lasting, devastating impacts on your psychological well-being. In the long run, emotions like anxiety, depression, stress, regret, and embarrassment can constantly make you feel guilty for not planning your retirement. And…with time, these emotions may become a permanent part of your personality.
Though it might be challenging to eliminate all of your debt, following my 5 steps, you can actually ditch your debt a lot sooner and enjoy your financial freedom.
Want to dig in? Let’s do this
Estimate your total debt.
If you’re frustrated with your steady mounting debt yet are scared to know your total debt amount, then this is the foremost step you need to take—calculating your total debt. Be it your student loan, auto loan, credit card loan, or personal loan—consider all of them. Once you've estimated the amount you owe, it's time to move on to the next step.
Change your spending behavior.
If you want to ditch your debt, change the spending habits that landed you in hot water in the first place. Be it about hanging out with friends, traveling across the globe, or having nice meals at restaurants, you must stick to your spending plan. Some old adages say "Live within your means" and "spend less than you earn" and many more that you might grow up listening to, and now it's high time to put them up in practice.
Be a side hustler.
If your current expenses are twice or thrice of your earning, then it’s time for you to make some extra cash. If taking on a second job feels exhausting, there is another short-term stint to multiply your earnings. If you're good at web development, graphic designing, coding, or writing, you can sell your skills online and earn some bucks to kick off your debt. Or if you don't have any such skills, you still can make cash by renting out a room on Air BnB or selling old clothes or other stuff. These are just some of the ideas, but ultimately, it's you only who know how to get away with this.
Go for debt consolidation.
If currently, you're paying off high-interest debt, then considering debt consolidation can help you lower your interest rate loan. With debt consolidation, you can lend a personal loan from a bank or any reputable lender and use that amount to pay off all of your debt right away. Now, you’ll have just a single loan to pay off instead of multiple; it will surely make your life easier to manage just a single monthly payment. Moreover, it will be a bonus point if you can find a person with a good credit score willing to cosign for you. This way, not only could you qualify for a lower interest rate, but also you could save some money for your emergency fund.
Stay motivated--track your progress --repeat!
Kicking off your debt isn't going to be an easy journey; hence, it's essential to stay true to the purpose. Don't let your motivation fade away or be fooled by the desire to spend emotionally. To stay focused on your purpose, think about your short and long-term financial goals and how they could bring a difference in your life. While it's essential to stick to the plan, it's also critically important to track your progress. Even if you have progressed incrementally, it's still a remarkable one. Keeping a weekly, monthly, or quarterly track of how you're doing will not only help you assess how much you have paid and how much you still owe but will also boost your morale to keep striving for your better future.
If you’re still struggling to get started; Please feel free to reach out. Let’s sit together and have an honest heart-to-heart conversation to figure out your action plan. Click here to book your consultation. Let's do this!
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