How to become debt free

If you want to become debt-free, understand first that it can not be achieved overnight. There is no magical formula for that. But, at the same time, it is an achievable aim. You must be ready to make a few adjustments to how you live. Of course, you need the cooperation of your family members and therefore, you should have a frank discussion with them before embarking upon ways to come out of your debts. The following few tips may help:

- As a first step, assess the quantum of your debts. Do not deceive yourself by pretending that your debts are manageable and therefore, you need not give a serious thought about them. Remember that debts have the unique capacity to multiply unless you take concrete action to liquidate them. List out all your debts. Likewise, calculate the income you earn regularly from all your revenue sources.

- Make a firm decision that you will not take new debts. This includes making purchases with credit cards also. Credit card debts accumulate faster than other debts and you should not lose sight of this fact. Abide by this decision strictly. Even if there is an emergency, avoid using credit cards or taking new loans.

- Cultivate the habit of noting down all the expenses you incur. You must know where your money goes month after month. If you do this, you will know which are the heads on which you spend more and on which heads, you can cut the quantum of your expenditure. There may be heads on which you may be spending unnecessarily. Only if you write down all your expenses, you will know these things. Once you know them, cut down all unnecessary expenses. You will be surprised to note that you can make a substantial saving if you stop these leaks.

- Decide to live within your income. Understand the differences between wants and needs. If you do an honest analysis, you can find out many expenses that can be avoided. Stop spending on eating out, newspapers, cable and so on. Use your electric consumption wisely for saving money on it. Stop spending money on gymnasium. You can do your exercises at home. Carry your lunch box to your work place. You and your family members will get accustomed to this style of living. Apply your mind to find out many other ways to cut expenses. Even your spouse and children may come out with great ideas. Pool all ideas and choose implementable ones. If you put all these ideas to use, you can use the money saved for paying back your debts.Debt Free & Prosperous Living

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