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Posted by John Wells
on 7:34 pm. Filed under Credit Tips, Photo Gallery Category.
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Getting out of debt and credit freedom really isn’t all that difficult: It’s all about one thing and that’s having a positive cash flow.
If you can turn your finances around so that you are spending less, and making more – and you keep doing this day in and day out, you will be out of debt in no time flat.
Positive Cash Flow = Credit Freedom
We’ve already determined that if you spend less and make more money, you can get out of debt by using your extra cash or extra money to pay down your debts. Some personal finance experts offer a method called the debt snowball, which means you start at the lowest priced debt first and then when you have paid that off, you put the extra money into the next lowest debt amount, and continue this until you become debt free
Other exerts suggest another method where you tackle the highest interest debt first, and work your way down until you have no more debt to talk about. If you do the math, they both end up working to be about the same amount so it really comes down to how you prefer to manage your finances: personally and emotionally or mathematically.
The next step is to spend less. You need to check your budget, and then do it again and see if you can’t find some extra money. A great tip is to track every dollar and every penny even that you spend. This will allow you to see exactly where your money is going. You might find that if you cut out the latte factor that you will have more money to go towards.
Tightening your fiscal belt, is the same as weight loss: you don’t want to overdo it, only to get discouraged and fall out of habit and back into your nasty old habits. Debt Freedom is a slow process, but most seem to be able to become debt free within 3 years by slowly and carefully spending less and making more money where they can.
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