Debt free living sometimes feels like an unattainable goal. Maybe it’s student loans or steep credit card bills — whatever it is, you can make it a goal to become debt free. Here at DEXSTA, we have some ideas that can help make debt free living a reality.
Make a Budget
Creating a budget is your first step if you haven’t done so already. We’ve mentioned this before, and we’ll mention it again: the 50/30/20 rule is helpful when it comes to budgeting. 50% of your paycheck goes to needs, 30% goes towards wants, and the final 20% is for your savings. Knowing your salary or hourly rate isn’t enough to help. Take it a step further by understanding your net income — it’s the final amount that’s on your paycheck. Is that money coming in weekly? Biweekly? Knowing how often you get paid is important, too. Once you’ve figured out your monthly take-home amount, it’s time to divide it up.
Make a List of Your Debts
It is essential to be methodical about paying off your debt; you want to get the most bang for your buck. List your debts by their interest rate, so that the highest rate will be at the top. The debt with the highest interest rate is the debt costing you the most money each month. Pay off your credit card debts by starting at the top of this list and work your way through until you are debt free.
Put Your Bills on Autopay
Automatic payments will make your life easier. When you set up autopay, it will cut down the risk of having a late fee — which is the last thing you need while working hard to get rid of debt.
Get a Side Hustle
If you’re looking to get rid of debt as fast as you can, do it in two ways: cut spending — your budget will help with this. Second, you don’t need special skills to be a do-er. Think dog walker, renting out one of your rooms, drive for Uber, etc. — these jobs can be done around your day job while earning extra cash.
Emergency Fund
If you don’t have an emergency fund, it’s time to create one. Emergencies happen, unexpectedly, and having a fund as a financial net is important. Make a long-term goal to have six months worth of expenses put away. We understand the importance of saving and enjoying debt free living. We have some options to help you save, to learn about them contact us or stop into one of the DEXSTA branches.