After years of trying all I could to get out of debt, I finally did. However, it is not a straight and easy journey as I got out of my comfort zone and did things I never knew I am capable of.
Becoming debt-free is actually a wonderful feeling. Although I was not the only one that made sacrifice. My wife and kids, in short my entire family all persevered, and together with some creativity, it paid off. It was not an easy journey but I am glad I did it. It all started when I came across Anik Singal two years ago. Apparently, he is someone that has gone through the kind of challenges I was going through at the time. This was before he published his popular book (The circle of Profit) and before he started doing business with Robert Kiyosaki of Rich Dad Poor Dad. Well, the most important thing is that I took some of the discussions between Anik and I serious and the steps I took thereafter have not only helped me to be debt free, but also financial independent. I am grateful for the journey I went through and I think it's important I share some of these lessons. In this article, I will be sharing five major actions that really paid off in getting me debt-free.
1. I made a budget
As much as I do not like this, I had to do it. The budgets allowed me to have a spending plan and structure it in a way that helped achieve my goals. Before getting my paycheck every month, I made a list of essential things, things I needed not things I wanted. This could be a little bit painful as you have got to cut off the excesses from your spending plan. Budgeting put me in a tight corner as I couldn't enjoy all the luxury I desired. However, it was for a while as this created enough room for me to service my debt. There are some apps that helps making budget easier.
2. I suspended my credit card
Oh what a drastic and painful decision this was! But I had to do it. It dawned on me that if I really wanted to get out of debt, I had to let go of my credit card. And you will agree with me that credit cards are very tempting, and often with high interest rate, that was the last thing I needed!
Although, it is possible to use credit card the right way and even profit from them, most people, myself inclusive don't use it that way. Thus, I had to make the big step - get the credit card off the way.
3. More Stream of Income
I knew reduced and careful spending was not enough to get me out of debt. I knew I needed something more to supplement my main income. I have always had a passion for online business, thus, I knew I had to tap into it. This drove me to research ways to make money online. It was actually my passion for online business that led me to Anik Singal in the first place. I was more interested in the fact that he was very open about his failure. I actually learn more from his past failure experiences. This helped me avoid common mistakes people make with online businesses. The extra money I realized from my online business enable me to service part of my debts sustainably.
4. The emergency Fund
This was one of the important steps that got me out of debt. By creating an emergency fund I was able to avoid the pressure of using credits cards when certain obligation arose. You never can tell when things like unplanned medical bills, car repairs, home repairs, impromptu travel springs up. These are things that come up once a while and, you just have to service them. Without an emergency fund, you might enter into debt trying to pay them off. The possibility of sacrificing your debt repayment plan for that month also exists. Thus, an emergency fund is needed if you must safely get out of debt.
5. Debt Became my First Bill
I saved this for the last because of its importance. In my bid to get out of debt I made debt repayment a priority. It is the first thing I settle from every paycheck even before any other essential bill. As a result of this approach, I was able to fight every unplanned circumstance that might affect my finance and debt repayment plan.
In summary, getting out of debt require a high level of discipline. Getting rid of my credit card and placing myself on a budget wasn't that a rosy idea. But, it paid off in the long run.