Article Title – How to gain financial freedom by paying off your outstanding debts
Article by Contributing Author Grace Ruskin
Are you in debt and finding a solution to overcome your debt problems? If yes, then don’t worry. All you need is right assessment and motivation to become debt free. Go through this article to know how you can achieve financial freedom by solving your debt problems.
Assess how much you owe
In order to get financial freedom, the first thing you need to do is assess how much you owe to your creditors and how you’re spending your income. To do so, list all your outstanding bills/debts and total the amount. Keep this in mind as it will motivate you to cut down your expenses and save as much you can to become debt free and achieve financial freedom.
Find suitable debt solutions
After you finish assessing your financial situation and calculating how much you need to back to your creditors, you have to find a way out of your debt problems. You can decide to pay back your debts on your own or get professional help if required.
- Getting out of debt on your own
By solving your debt problems on your own, you can save the money that you otherwise need to pay to a professional organization. Here are 3 ways to get out of debt on your own.
Ø With the help of balance transfer method – If you’ve not reached the credit limit on your lowest credit card, then with your creditors’ approval, you can transfer your comparatively high interest credit card bills to this card. In this way, you can pay off your credit card bills relatively fast. You can also take out a balance transfer card for the purpose. However, such cards offer low introductory rates for a certain time period. So, make sure you pay back the debts within the stipulated time as otherwise, you’ll have to pay high interest rates on the outstanding balance.
Ø By using debt snowball strategy – In this method, you need to list your debts in a sequence – from smallest balance to the largest. Then, start making minimum payments on all your bills except the one with the smallest balance. Try to pay as much as you can on the smallest debt. After you pay off the smallest bill, repeat the process with the second smallest one till you become debt free.
Ø Negotiating with creditors to settle debts – If you cannot pay back the outstanding balances in full, then explain your financial situation to the creditors and request them to reduce the payoff amount. You can try this method to settle credit card bills with huge outstanding balances. It will help you become debt free faster.
You can get help from a consolidation and settlement company to become debt free. When you contact such a company, it will analyze your financial situation and offer you a consolidation and/or settlement program depending on your financial situation. By enrolling in such programs and making the agreed upon monthly payments to the company on time, you can become debt free in a systematic way within a definite time period.
Plan a suitable budget
If you opt for professional help, the organization will assess your financial situation and help you plan a budget. If you’ve decided to get out of debt on your own, then you need to plan a suitable budget. It will help you assess where you’re spending your income and if needed, you can cut down expenses so as to save more and achieve financial freedom as fast as possible.
Even after you get out of debt, it is advisable that you plan a budget and modify it from time to time. It’ll help you have a better control over your finances and in turn, help you in attaining your financial goals within your desired time frame.