How to Stay Debt-Free?
When there are challenges to the monthly budget that you set, there are ways to make ends meet without sacrificing your basic needs. Here are some of the top tips to help you in those challenging times:
1. Save Bonuses for Debt Payment – Wage increase, bonuses, and other additional perks that are not part of your net income can be used as a “buffer” to your monthly budget. Most people will use bonuses for enjoyment, so most of them either end up adding another one on their credit list or wondering where their bonuses have gone. Instead of spending money on going to bars to `celebrate’ or buying another gadget, use your bonus to pay your debt. You can enjoy later, when all your debts are gone but for now, spend it on something useful. If you get a raise, or a bonus, pay one item on the list IMMEDIATELY. Your regular schedule and monthly budget should stay the same, that way, you paid something that is unexpected. If the bonus is big enough to get rid of an item on your
list, then pay that item. If it is below the minimum payment for any of your listed items, save it for when your chosen payment date comes. That way your budget will be higher.
2. Use Free Money for Debt Payment Immediately – When you get a discount on your lunch because of a promotional offer, or perhaps someone treated you to dinner, you are creating free money. Free money is something that comes from discounts, gifts, rebates and rewards. Just like bonuses, free money can be added to your monthly budget. Do not hesitate to take advantage of free money that is offered to you. Use the money that you saved for paying your debt.
3. Strike a Deal – Some creditors can be fierce when asking for payment, but there is nothing that diplomacy cannot solve. If there comes a time when you really cannot produce the monthly budget that you set, strike a deal with your creditor. You will be surprised to find out that most creditors are not as cruel as they may seem. Most of them will accept promissory notes and provide deadline extensions. All it takes is a good explanation and
sincerity in displaying your willingness to pay.
3. Search Your Closet – There is always something to sell. Search your closet for cool stuff that you can sell online or even to your friends. These should be things that you are glad to let go of, not those that you still have sentimental feelings about. In other words, look for junk. What is junk to you may still be of some value to someone. Selling the things you do not need is a good way to extend your budget, and clean your closet.
4. Borrow, Ask for Favors or Do-It-Yourself – It would benefit you greatly if you stop buying things that you will only use once or twice. Ask around first to see if one of your friends or family members has it and borrow. That will give you free money. Asking for favors instead of paying for services is also a good way to save (but do not do it more than twice). If you are uncomfortable about asking for favors, then just do it yourself – do your own laundry, wash your car, cook your meal instead of eating out, etc. Not only will you have free money to add to your monthly budget, you will also avoid having more debt.
Freeing yourself from debt is not an easy thing to do. You will encounter many different challenges such as tempting offers from new creditors, going over your monthly budget, emergency expenses, etc.
The key is not lose sight of your goal: to be debt-free. You may encounter all types on setbacks, but the more important thing is to know that it is not over until you scratch all the items on your list.