Skip to main content

10 Facts You Never Knew About How To Become Debt Free On A Low Income

Recently I had a talk with my dad about his financial success, and one of the things that fell on my heart was that, he practiced being debt free throughout his life.

My dad is financially sound, but he is not wealthy. He has a decent house, which does not belong to any bank, no loans, no rents and no credit card debt. Being debt-free is exciting, he says. Well, with his credit history, he can get a loan, so life is slightly perfect. But I recommended to him, to do away with borrowing if he ever gave that a thought.

Stay debt-free, be wise with money, and you can live a credit-free life.

Unfortunately, that is the life most people wish they had. Yes, you can have a meaningful life without borrowing. It is difficult for most people to get enough to rent, let alone buy their own homes.

Here are some tips on how to become debt free on a low income, if that appeals to you

1) Have an emergency fund

A lot of people use credit as a sort of last resort in unexpected situations. Rather use your current savings to make your emergency fund. This will save you from debt when something unexpected comes up. Living without credit can be hard to achieve, but having a good “rainy day savings” will be your way out from borrowing.

2) Save for those goals.

Having gotten the emergency fund adequately covered, start saving for other important things. Do you plan for further education? Do you want to travel the world? Buy a new home? Decide on your highest-priority goals, and set a figure. Save towards the goals now. Without borrowing, it should be fairly easy.

3) Get a debit card for yourself

You do not have to borrow after getting a debit card to transact business, as whatever you buy is charged straight from your account. This means you can only buy when you have enough money. Remember, a debit card is not the same as a credit card. Anytime you use a debit card, the money is taken from your current account. With a credit card, what you are doing is borrowing money to be repaid later.

4) Make your money work for you

The main problem with credit is that you throw away money by paying interest on the money borrowed. In place of that, gain interest by investing your money. This means, instead of paying interest when you borrow, you are rather earning interest from your investments. Either way, we have interest, but that depends on the side you stand-Borrowing or going for credit. It takes capital to make more money than to make money from your salary.

5) Pay cash for your car

Those who are guilty of purchasing cars with car loans all their lives, this may seem a herculean task to buy a car with cash. The good news is, it is possible and a lot of individuals do it. In place of settling loan payments, and paying twice the price of the car over the course of the loan term, make savings towards it over the course of the years you plan buying the car in future.

Use the car you have now as long as possible. Have the amount you will otherwise have paid as loan for a new one saved, then buy your new car in cash, in future . It will be a second-hand car, but it will still be yours.

6) Save for retirement

No matter how bad your credit score is, this is common knowledge. Without being saddled with debt, you can increase your savings for retirement. Then you can go on early retirement. Be grateful for not being in debt.

7) Carry enough cash when you travel

It is popularly believed you cannot book a hotel or get a car without credit card. This is not true. You only have to do more hotel search. This applies to car rentals too.


Popular posts from this blog

What I Wish Everyone Knew About How To Be Happy In Life

It is an open secret money cannot purchase happiness. We though pretend with more money we would be happier. We are trained from childhood to understand how to be happy in life might be achievable through having more money.
Can money really buy happiness? We are trained to want more wealth (we know the wealthy are not happy either); we are conditioned to get the trending style or electronic appliance. Example, look at how lots of people throng the stores during the holidays to get gifts for their friends and family. We aspire to get more money then can we buy what we want and be happy in life.

But do these things really bring us happiness? True happiness cannot be bought. In spite of how fat our salaries are, how much is in our bank accounts.The mansions, clothings and cars we have acquired over the years, all of these cannot give us that happy life. Unfortunately, some will realize this later on in their lives.
Answer to how to be happy in life What brings us happiness? By stroke of…

Learn Easy Ways To Make Money Now

A way to make your life easy is to make getting income automatic. Study this easy ways to make money in order to make your life simple. One must admit, it is a difficult task when you begin at first, but after you have had it all done and setup, it's rewards are huge. Rather than having to work daily and monthly to make money, try your best to setup your own business or income stream, and do your best to keep that business or income stream running with little effort.

I have spoken before about making your payments and savings automatic. Now let’s look at easy ways to make money in an automatic way.

Make it easier The main idea here is that by removing unneeded things in your life, you can have time to focus on things which are truly important. The same principle applies to income making. All over the world, most people earn salaries to support themselves. Sometimes we work two or three jobs, in order to be able to pay the expenses, or pay off debts, save.

That is the generally ac…

Learning How To Save Money Each Month From Salary Is Not Difficult At All!

Like many young people, I dread budgeting and paying expenses and thinking also about savings and pension. I have observed that living consciously means not only celebrating in this time, but taking care of things at this moment, when they are not huge, rather than wait when they get out of hand.With that in mind, I have a few tips for anyone else who wants to learn how to save money each month from salary.
1. Spend less than you make OK, this is almost the only tip you need. People spend more than they do not really have, and that is the biggest financial problem of such individuals. Then they end up in a tight corner, and it’s hard to get out of the corner, and they work long hours to keep up with spending beyond their means.

The result is an unhappy life in which they are trying to pay for spending, they don’t need really.

Spend less, work more, worry less, be happier.
2. Try not to get into debt If you spend less than the salary you make, you won’t be owing, clearly. It’s simple,…