How to Pay Bills and Become Debt Free
- 1). Write out a plan.
Develop a plan that will work for you. Use a pen and paper, have a meeting with your spouse, and write down what will help you get to where you want to be. If you project it will take five years, then make a five-year plan. If you can do it in three years, then make a three-year plan.
- 2). Set a payment schedule.
Determine a schedule for payment of debts, and a goal or date you believe you could be debt free. Real freedom comes from uncommitted money, and that is your goal--to have income that is yours to do what you want.
- 3). Do a breakdown into six-month segments.
Break the schedule or plan down into six-month goals, based on the overall plan you have worked out. These are benchmarks you can use to review the plan and see how you are progressing in your goal to become debt-free.
- 4). Avoid adding debt.
Remember that freedom from debt is easier if there are no added debts along the way. Do not make additional charges on your credit cards, and do not shop with friends. Peer pressure is the same as an adult as it was in high school, and you are more likely to make a purchase if a friend is with you.
- 5). List your projected needs.
Make a list of your projected needs, not wants. Once that list is made, do not add wants. See how you can get the items you need at the lowest possible cost. Comparison shop, thrift shop, internet shop, but do not buy until you HAVE to have the item. If you need coal or oil for winter heating, check sources, pricing, and compare. Buy when you must, or when the price is the best you believe you can get.
Do this for everything you pay for, including insurance. Get the best deal for every expense.
- 6). Think about your finances.
Decide what will be necessary to get financial freedom. It is not always necessary to take another job outside the home if you can sell on the internet, have garage sales, sell at the flea market, or use your skills to make money at home. You may be able to tutor, write, create or design to add income to help become debt-free.
- 7). Develop a new income stream.
Set up plans for a new income stream, and get to work on it. Now is the time to do whatever is necessary to have some extra income to apply to your debts. This will not be extra income to spend, but will be for decreasing your current indebtedness.
- 8). Make plans for special events.
Make specific plans to cover Christmas and start now to enjoy Christmas debt-free. See Resources below for additional information about how to have a debt-free Christmas. This is one of the more difficult hurdles, but it is also an opportunity to develop your skills for your new income stream.
- 9). Schedule payments.
Develop a plan for payment of bills and expenses and write it on a calendar. Pay bills timely to prevent any extra charges, and write the dates on the calendar so you do not ever have to pay late fees. Late fees are a fine or a penalty, and you get nothing in return.
Move the payments earlier every month.
Schedule payments earlier every month so that eventually you are paying two weeks in advance. Work this up to a month in advance. Once you can pay the house payment a month in advance, you can live with much less stress. Living debt free also lets you live more stress free.
Celebrate the freedom.
Enjoy your new freedom by celebrating with a special dinner at home every six months. Involve your children, and make this a family affair. Once you make progress, everyone will want to help.