It’s amazing how Americans are getting deeper and deeper into debt. Of course, credit can help you deal with financial hardships but if you are not diligent in its utilization, you can ruin your financial profile. Nevertheless, most people are relying on personal loans to cover their recurrent expenses.
Financial freedom is perceived in different ways depending on the values and preferences of an individual. In fact, its attainment is coveted by almost everyone but it can be out of reach if you are not ready to make strong commitments. This is an opinion that has been held by people with huge debts and it emanates from the feeling of helplessness that comes with debt constraints. This article intends to shed light on the belief that attaining financial freedom is farfetched when you have debts.
All it takes is planning and you are ready to get started
With debt hanging on your shoulders, it is easy to focus on the present while ignoring your future. On the contrary, financial freedom calls for adequate planning for a better future. If all you do is run after instant gratification, chances are high you won’t have the necessary resources to invest in your future.
In most cases, huge debts are caused by bad spending habits. Unfortunately, these are not easy to break. The tragedy is that you have to choose between destructive financial habits and a secure future. When you are deep in debt, it’s normal to feel like you will never break free. In essence, all you need to do is break your habits and replace them with new and better habits.
This doesn’t mean you should stop enjoying life in the name of saving because there are other ways of living a fulfilling life without hurting your finances. Basically, you must reflect on your financial goals as well as put your wants and needs in perspective.
You can increase the amount of money you earn every month
If your savings plan isn’t solid, you might take forever to attain financial independence. Every seasoned financial expert will be quick to point out the importance of living life below your means at all times. When it comes to spending, no amount is huge since it will eventually be depleted.
No matter how bad you want to kick-start your savings plan; it will only be optimum after you know exactly where you’ve been spending your cash. This can be easily done by always tracking all your expenses and decide on what to cut back on.
Limiting your expenses is not sufficient because there is a point you won’t go beyond. As such, you need to look for ways to get more money coming your way. For instance, you could offer your skills on freelancing sites or even sell things on the various online market platforms.
You can make a commitment to pay all your debts
The benefits of credit are many but some people find themselves on the receiving end due to some miscalculated moves that make you overestimate your propensity to repay the realistic loans. What you must realize is that being in debt doesn’t mean that your fate is sealed. In fact, you can bounce back and pay every single penny that you owe and gain your financial freedom.
Today, there are tons of debt consolidation options that are here to make sure that you won’t have to deal with multiple payments which can be difficult to track. If you are struggling with several loans that are characterized by high-interest rates or strict terms, this option could work wonders for you. Basically, the new credit deal will settle all your outstanding loans and you’ll only have to deal with the combined payment. On the other hand, debt consolidation plans will enable you to pay better interest rates with better payment terms.
When creating your budget, make sure a significant portion of your resources are dedicated to eliminating the debts. Once you’ve paid all your outstanding loans, it would be wise if you started putting the same amount towards an investment fund that will quicken your financial freedom journey.
Developing healthy spending habits is important
If you are to make any significant progress in the journey to financial freedom, you have to drop all your unhealthy spending habits. The fact that you are saddled with hefty debts implies that you have made poor money decisions in the past. Basically, the only way you can ensure that debt will not catch up with you again is by rethinking your spending preferences. Otherwise, you will have to go through the debt elimination hassles in the near future.
Contrary to popular belief, breaking unfavorable money habits is not as difficult as theorized. In fact, psychologists report that you only need about three weeks to create new habits. Therefore, this is a question of how bad you want change to happen in your life. It’s never about if it’s possible but rather a question of when you are willing to make it happen.
After spending lots of willpower and time to replace your old habits it is wise to ensure they stick well. In the long run, it’s your propensity to handle money diligently that guarantees a lasting wealth creation and financial freedom. All matters in perspective, this isn’t a license to embrace a mean and stingy personality especially if you have a family. Basically, there is nothing wrong with throwing occasional treats to your loved ones.
Start investing diligently
While saving some cash regularly is a critical aspect of financial management, it is only a stepping stone to a bigger front. Irrespective of your income, you should dedicate something towards an investment fund.
After you’ve saved a substantial amount, it’s time to start investing the money in reputable channels. Of course, investing requires careful consideration to ensure your money won’t get lost. Nevertheless, don’t be tempted to hoard your cash in a savings account since the earnings are not worth it. One advantage of investing your savings is that your money grows over time. Most importantly, the losses caused by inflation are well mitigated.
Before making any investment, you would be better off if you consulted an experienced investment expert. This will not only protect you from nasty losses but it will also ensure that you are getting the most out of your investments.
Final words
Climbing out of debt is an engaging process that takes time. As such, it is quite normal to fall short of the laid out expectations. However, the most important thing is to constantly monitor your overall progress and make the necessary adjustments to your plan. Most importantly, form a habit of reflecting on your mistakes and don’t forget the underlying lessons.
And finally, don’t forget to celebrate every time you achieve a milestone you’ve been working towards. This keeps you motivated to continue on the journey to a debt-free and secure future.