6 Practical Tips to Achieving Debt Freedom

Staying out of debt is a popular topic in personal finance circles, but it's often hard to pin down exactly what debt freedom looks like and how to achieve it. There are many different forms of debt, from student loans to car loans to mortgages and more, and that makes it difficult to get an overarching view of the topic.

To most people, achieving debt freedom can seem like an impossible feat, but with a little elbow grease and the right strategy, you can get out of debt in no time!

Here are six practical tips to help you become debt-free.

1. Track Your Spending

If you want to get a handle on your debt, the first step is to track your spending. This means knowing how much money is coming in and where it's going out. You can do this by setting up a budget or using a personal finance app. This will help you understand what expenses are necessary and which ones you can cut back on.

2. Create a Debt Payoff Plan

To get started, make a list of all of your debts, including the amount owed, the interest rate, late charges, and the minimum monthly payment. Next, prioritize your list according to how long it will take you to pay off each debt using only the minimum payments required on each one. 

Finally, focus on paying off those with the highest interest rates first. These are usually credit cards or other unsecured loans.

3. Start Saving

This may seem impossible when you're already struggling to make ends meet, but it's crucial if you want to become debt-free. Even setting aside a small amount each month can add up over time and help you reach your goal. In addition, having savings will mean that you have the ability to cover any emergency expenses that come up or use the savings to get out of debt quicker.

4. Additional Income

Bringing in extra income can help you become debt-free quicker without putting a strain on your current earnings. You can do this by picking up a part-time job, selling items you no longer need, or finding other creative ways to make money.

5. Live Within Your Means

There's no glory in living a hand-to-mouth existence. Avoid impulsive purchases that you can't afford, and instead, only buy what you need with the money you have available on hand. This may also mean reducing your expenses on things like cable TV, eating out, random trips, and even downsizing your home so that you have more cash on hand for saving or paying off debt. 

It may take some time to get used to living on a budget, but it will be worth it in the long run.

6. Seek Professional Help If Necessary

There's no shame in admitting that you need help getting out of debt. In fact, it's one of the smartest things you can do. A professional can help you create a budget, negotiate with creditors, and devise a plan to get out of debt for good. It may seem expensive initially, but hiring a pro could be cheaper than paying interest on your credit card balance.

Final Thoughts

There's no magic solution to becoming debt-free, but the practical steps in this article can help you get there. Setting clear financial goals and staying disciplined with your spending will put you on the path to paying off all of your debt in a timely manner. Contact National FCG for more information today!