Discover Debt Freedom!

Debt freedom is a scary proposition for some people because they have been taught by society and the others around them that the only way that they can have the things that they desire is to go into debt to obtain them.  Nothing is farther from the truth, but this is the common belief among many people today.  In fact, the rules for getting out of and staying out of debt are very simple and can be broken down into four main rules.

Rule 1 – Spend Less Money Than What You Are Making

This rule should be common sense to most people but in the days of easy credit and low interest rates, many people became addicted to spending above their means.  If you continuously spend less money than you are bringing home in your paycheck, you will have less of a need to put items on credit, where you will be charged high interest rates, and will be able to handle financial emergencies as they come along.  Spending less than you earn each month should be the goal of every person that is interested in getting out of debt.

Rule 2 – Avoid High Interest Debt

High interest debt is one of the biggest ways to waste tons of money for no gain.  Interest payments are just payments for the ability to borrow money from a creditor and provide nothing to the person that is paying the interest payments.  Most high interest debt is credit card debt, where the creditor can charge 20% or more in interest, while short term bank loans generally have a much lower interest rate.  In order to save more of your money from going from your pocket into the coffers of a large banking institution to pay their executive’s multi-million dollar salaries, stay away from high interest debt at all costs.

Rule 3 – Protect Your Possessions

A large expense for many people is replacing lost or damaged items that they believe they need for a comfortable life.  If you do not take care of your possessions, you will find that they need to be replaced more often, which means you will need to spend more money to keep your current lifestyle.  Simple tasks, like making sure you get your vehicle’s oil changes done on time or turning off the television when you leave the room for long periods of time, will save you a great deal of money in repairs and replacement costs.

Rule 4 – Do What You Can For Yourself

Paying someone to do simple tasks will cost you much more than you would have spent doing the same task yourself.  From making coffee to fixing lunch to making minor repairs to the home, you will spend two or three times as much asking someone else to accomplish the task than it would take in money, time, and effort to do it yourself.  Although some larger tasks that require specialized tools and expert knowledge would be better left to the professionals, there are many things that you can learn how to do on your own that could save you hundreds of dollars each year.