PEW conducted research in 2019 about the spending habits of American families. It revealed that each month, many Americans spend more money than what they actually earn.
You must be wondering how this is possible. It is simple: Use of credit. Most of us are struggling with debt. That is the sad reality.
Are you tired and sick of the paycheck to paycheck lifestyle? Do you desire financial liberty and want to live a debt-free life? Check out these 3 simple ways on how to get rid of debt.
Set and Stick to a Budget
A budget tells you how much money you expect to earn within a given period of time. It also shows the expenses to expect. Your bank statements can be a good source of such information.
The 50/30/20 rule is a useful guide when it comes to budgeting. Under this rule, 50% of your income should be spent on necessities such as rent. 30% goes to wants such as the want for drinks with friends on Fridays. The remainder goes to servicing your debts and savings.
Once you set your budget, stick to it. Sticking to your budget helps you avoid making impulse purchases. In most cases, we incur debts on things we don’t actually need.
Consider Picking up a Side Hustle
Your debt reduction efforts are amplified when you earn more money. But how? Pick up a side hustle. Depending on your unique talent or skill, lookout for ways to make an extra buck.
With the world becoming a global village, the opportunities are vast and limitless. Just chose that which perfectly suits your skill sets.
Digital marketing, article writing, and graphic design are skills you can learn and earn from. You, however, have to make sure that the extra buck earned goes to paying off your debts.
Drop that Expensive Lifestyle
It starts with separating basic needs from mere wants. Basic needs are things that are essential for your survival. Wants only to serve your status.
Start by meeting your basic needs. Things include food, shelter, and clothing. Remember to keep this on the bare minimum.
Is it drinking or smoking that you feel is your expensive habit? Quit. Alcohol and tobacco have no real benefit.
Another best plan of attack is to replace costly habits with less expensive ones. There is always a cheaper option. Take it.
To sum it up all, the journey to live a debt-free life does not happen overnight. Sticking to these proven three simple ways to get rid of debts may require that you make a few changes to your lifestyle. This doesn’t have to be depressing. Do it gradually. Don’t end up depressed in the process.
READ: How Best can You Manage Your Finances During Covid-19?
This piece has been written by Mr. Iyaya Kiveu