Posted on | November 17, 2010 | Comments Off on Transforming Debt into Wealth Easy and Simple
More and more people are finding themselves in debt as the economy seems to become worse by the day. There is no shame in this, because debt happens, and it is not impossible to erase. It simply takes time and effort to start transforming debt into wealth easy. One cannot clear debt without making some sacrifices, but anyone can turn their life around and get out of debt.
First, one must clear their debt. An easy thing to do in theory, but practice is often quite a bit harder. This is where a great deal of sacrifice comes in – one must find the money to get rid of debt, usually starting with those items that have the highest interest rate. Refinancing to a better rate is a good idea, but eventually all debt sources must be paid off in full. This may mean tightening one’s budget to an almost absurd degree, but it will pay off in the long run.
Next, one must stop accruing more debt. This means saying goodbye to credit cards and loans – if it cannot be paid in cash, it may not be purchased. Create a budget, stick to a strict spending schedule, and do not spend money on anything that cannot be immediately paid off. All of one’s income should be focused on daily living and eliminating debt.
Finally, one can begin to actually build wealth instead of merely surviving. Paid off debt means no more payments to others – money that comes in can finally stay with you instead of going to everyone else in the world. This money can be used for investments, or can simply be used to just enjoy life. A lack of debt means an increase in wealth, and an increase in wealth can mean an end to worrying about money.