Making a commitment to live debt-free

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Reaching the point of being debt-free is sometimes a hard objective to reach. Once there though, the ability to remain free of financial obligations is in reach. It sounds difficult but could be entirely possible if the right commitment is made.

Want to be debt-free? It takes some changes in your routine and habitual spending.

Reject our instant gratification society

Many people have a true desire to save money, but one of the problems is the fact we live in a society where savings is easier said than done. Society thrives on the ability to receive instant gratification.
Long gone are the days of waiting to have to save until enough money has been accumulated, if a person wants to make a purchase, all he or she needs to do is whip out a credit card and slide the plastic in a machine (or punch in a few numbers online) to buy the desired item.

This easy ability to spend wasn't always possible. While plastic does carry many benefits, since it has become an option, instant credit also has contributed to high debt for many people and this is one of the major drawbacks. In the United States, the average credit card debt is a whopping $15,706 in 2015 (excluding households that do not carry debt). Canadian debt is also on the rise when compared to the previous year; the total average consumer debt was cited as $20,967 earlier in 2015.

Through automation, it is so easy to spend and accumulate massive debt, so easy people often don't even realize it is happening. Our easy ability to spend is definitely not conducive to savings. Making a commitment to live debt-free means you'll have to reject our society's instant gratification mindset. Pay close attention to how you use your credit.

Make a commitment to living debt-free

To avoid excessive financial obligations and live debt-free, it's important to invest time and exercise patience, along with vigilance. If these three can be met, they will go a long way in helping you to live a debt-free lifestyle.

The first step is to alter the mindset of thinking buying on credit is a good thing. Sure it is convenient and avoids the hassle of always needing to have cash on hand, but if your bank account doesn't have the cash to pay off the credit card bill when it comes due, then the purchase shouldn't be made. This way the interest associated with the credit won’t keep the debt flowing. Use credit sparingly – in case of emergency or only if the bill can absolutely be paid in total while still keeping up with other bills.

Stick to a budget

To retrain yourself to live a debt-free lifestyle, a good place to start is to create a budget and keep track of all incoming income and outgoing expenses to see whether the bottom line is in the proverbial black or red. If your bottom line is in the red, this tells you you should probably make the extra effort to pay down existing debt and make a sincere and committed effort to not accumulate new debt.

If the bottom line is in the black, you have a little bit more leeway, but debt can snowball easily if not careful. That being the case, to remain debt-free, it is a good idea is to make a change in spending habits. To do this, the first step is to eliminate any unnecessary expenses. Ask yourself a few questions:

• How expensive does my mobile plan really need to be? Can I cut back on my data plan, minutes or use a more basic phone?
• Can I cut back on my cable TV plan? Is using a streamed movie service more cost-efficient? Examine what other options are out there.
• Can I lower my utility bills? What are my household habits where energy is concerned?
• What do I spend on entertainment or eating out?
• Do I spend a lot on lavish vacations. Maybe consider a staycation instead for a few years or, at least something less elaborate.
• Do I buy breakfast or lunch too often at work. Brown bagging it is a lot cheaper.
• Do I really need a car payment? Consider buying a reliable older model instead of carrying this debt.

Taking a look at these kinds of expenses and scaling back where possible can create healthier bottom line in your personal budget. In the end, this is all money saved that can contribute to a debt-free lifestyle. Additionally, you can save money once debt is paid down, this money can be put towards other living expenses. For instance, if you're carrying a mortgage, the extra money each month can be put towards paying that down too - bringing you that much closer to financial freedom.

Making a commitment to live debt-free can involve lots of change and it isn't always easy. It is also not an impossible goal to reach, for most people it is entirely within reach. Reshaping financial goals is an important obligation to make in order to achieve a debt-free lifestyle. To succeed in living debt-free it is important to sit down, make a plan and then make a solid commitment to follow it.

Eliminating debt is not always easy by a long shot, and accomplishing this goal will take strong dedication. Just remember, it takes time, patience and vigilance in order to be successful. Achieving a debt-free lifestyle won't happen overnight.




Additional source: http://www.cbc.ca/news/business/consumer-debt-rising-but-canadians-have-a-better-handle-on-it-1.3204568