Can you imagine having no debt? or virtually no debt? Many people do not know what it is like to be debt free.Many young adults start out their independence after college with student loans to finance.Some people argue that in this era,it's not possible to live a debt free life because you can never be in possession of all the resources you require to meet your needs and wants.
In Africa,generally speaking most people do have dependants.Forinstance, when you are the first born, parents have a habit of saying that you should look after your siblings. And besides, some parents are also in need of being looked after.With such as a high dependency level,many struggle to have enough money. Living a debt free life is possible, however, it requires discipline.One should make a personal decision to live within their own means. Bad debt can be a source of stress and grief that can cause you to constantly worry.
Disclaimer: Debt free living doesn't always mean having absolutely no debt at all.It simply means getting rid of bad debt and keeping good debt.
With that said, let us now delve into 6 personal finance tips for you to live a debt free life.
1) Careless spending habits contribute to your situation
Take time to compare your monthly income with your expenses.Try to divide your spending into mandatory expenses,or needs and wants.Mandatory expenses include: Rent, Food, Transport, Child care e.t.c. Discretionary expenses include: Gym memberships, Eating out,Personal grooming, Home decor.Once your expenditure is reduced,create a budget.This can prohibit you from unknowingly overspending.
2) Plan for Emergencies
Anyone can be caught unaware by an event they did not prepare for.Anticipating and then taking measures in advance is the best way to manage emergency situations.Forinstance,you can have an emergency fund for things like medical bills,home repairs,bereavement among others.
3) Understand the difference between wants and needs
One of the basic ways of controlling spending is by applying this rule.However, it has proven hard for most people.Needs are things we need every day to live like food, shelter and clothing while wants are virtually everything else.Taking off time to distinguish between wants and needs will help you live a debt free life.
4) Ascertain essentials for your living
Discover services around the home that can be done without an outside cost.Forinstance, instead of hiring a laundry lady to wash your clothes and clean up the kitchen,be kind to your hard earned money and do the cleaning yourself.
5) Start to plan ahead
At times it feels like expenses have just come out of the blue and yet we knew it was coming but we didn't just plan for it.Forinstance, things like traveling to see family members,a birthday gift to a loved one among others are just a few examples of expenses coming but we ignore them.To maintain a debt free life you ought to plan ahead for them.
6) Practice saving
Always practice saving regardless of how much you earn.Even though you are in debt.There are myths surrounding saving money.Forinstance, I earn little so I can not save or God frowns on saving e.t.c. are merely baseless beliefs that should not lure you into the habit of not saving.
I would like to know your thoughts on this matter, living a debt free life. Please share your thoughts in the comments box below and also remember to share with your colleagues after reading so that no one wallows in debt.
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