Where to Start on Your Financial Freedom JourneyWhere to Start on Your Financial Freedom Journey

The Smart Way to Avoid Future Debt and How to Create A Financial Freedom Resolution You Can Stick to.

The journey to financial freedom has to begin somewhere. The truth is, it is never too late to start planning for your future, even if you are swimming in a pool of debt, or even if you are close to the point of bankruptcy.

With New Year’s around the corner, it’s that time to set some new goals and resolutions. If financial freedom is one of them, then please continue reading. 

Even though you will have to learn to continuously carry out this particular financial freedom goal/resolution for the rest of your life, there is no better time than to start right now. The reason why I say this is because debt can be a never ending cycle if you don’t plan accordingly. 

You have two choices when it comes to debt; you can give up and stop paying all together or you can pay what you are able to afford and do your best to keep your accounts current. There is a major difference between those two choices which plays a large role in any future endeavors that will require a loan, for example a new home or a car. 

A delinquent debt can affect your credit drastically, which will also affect your ability to borrow any other loans in the future. The trust factor between a lender and borrower is determined by credit history and rating. If you are already dealing with delinquent accounts, the first thing you will need to do is speak with a professional Debt Settlement Company to learn about your options. 

The goal to avoid this scenario in the future, is to not borrow more than what you can afford to pay back. Although unexpected issues may arise after acquiring a credit card or installment loan, you can still attempt to add a ‘safety net’ amount to your repayment budget. The trick to staying debt free is to only borrow if it is absolutely necessary and borrow only what you know you can pay back comfortably and within a short period of time. By doing this your credit score will actually increase and your credit history will show that you are a responsible borrower.

A credit card or installment loan does not have to always have a negative effect, there are ways to benefit from them as well. A good example of this would be, to pay more than the minimum monthly to close the debt out as fast as possible. Another example would be to only use your credit card for things you already have the funds in the bank for, like gas, cell phone, groceries, recurring utilities, etc. 

The things I mentioned are all a priority and a necessity to get by. Since you already have these expenses within your budget, you should be able to use only what you have the cash for and pay off the balance at the end of your billing cycle each month. 

A person that is deep in debt has either ran into some major unforeseen and expensive emergencies, are living beyond their means, or possibly even both combined. Majority of Americans are currently in debt or will be once or twice in their lifetime. It comes as no surprise that we all have at some point, or eventually will fall into the trap of borrowing money. If you are not careful and overspend, you will see the repercussions and feel the stress that debt can bring.

There are a few things you can do right now to begin your financial freedom journey today. The sooner you start, the sooner you will be able to reduce your debt load and stress.

  • Gather all of your monthly expenses, down to the smallest things, like your netflix subscription, cell phones, utility bills, mortgage or rent, manicures and pedicures, groceries, gas, haircuts, medications, etc. Now, add them all together to get your monthly necessity spending average. Include a miscellaneous buffer amount as well for things like clothes, gifts, and emergencies like dental work or dr. appointments, etc. 
  • Now that you have your monthly spending average, subtract that amount from your monthly take-home income. If you have some money left over, this money should be put aside into a savings account or take some and apply it to your credit card bill or installment loan payments. This way you can pay them off faster without paying too much in interest. If you do not have any money left over, it means that you may be living beyond your means and may have some unnecessary expenses. You may need to reevaluate your expenditures. Writing everything down gives you a better outlook on what you are making versus what you are spending.
  • Save money whenever you can, use coupons, look for deals, use groupon, sign up for rewards at your favorite places, use money saving apps like Get Upside for gas or use Fetch to get points from your receipts. You can also cut down on some expenses by asking yourself how important they really are to you. 
  • If you are currently in debt and cannot afford to pay your bills, then you really have to skimp out on something else you are spending money on. If your loan bills are current, you can always look to get a consolidation loan. This would combine all of your current accounts into one larger loan with a lower interest rate. This will reduce your monthly payment, however, keep in mind that you are acquiring another loan that will go on your credit. 
  • If you are currently in any kind of debt and behind on payments, possibly in collections and the credit card account has been shut down, then it is time to seek help from a Debt Settlement Company that can assist you. Debt settlement is when the balance is negotiated to be paid off for less than what you owe. It is a great option but I would not suggest doing this on your own for many reasons, mainly because a professional will know how to do this quickly, efficiently and will get you the best deal. Also some companies like Encompass Recovery Group also provide Legal Protection included in their program. This will keep lenders from filing and winning a lawsuit against you.
  • Write down your goals, your desired future purchases, and the things that you want to accomplish financially. This will inspire you to stick to your budget and plan.
  • Come up with a debt savings plan. See what you can afford by calculating all of your expenses, and depending on how much you will have left over to apply to your outstanding credit card or installment loan bills, you can adjust your expenses to fit within your means. Write down how much you will be able to apply towards bills and save. Add it all up over 12 months so that you can see what your progress would be over the next year if you stick to your plan.

No matter what your situation is, there is always hope and a professional Debt Relief Specialist that is ready and willing to assist you. You just have to take the first step by reaching out. They will even help you to calculate your budget and find a comfortable payment that you can afford. 

Knowing what you want in the future and how you will get there is half of the battle. The 2nd half of the battle is to start following your budget and financial plan so that you can immediately start to see results. 

Financial Freedom is not just a dream, it is very doable even for the people deepest in debt. By making your resolution to save more money and to handle your debts, you are actively taking steps toward a better financial future, a debt free future. 

Writing down your goals and making your plan to achieve them will help you to see the path clearly, and will help to motivate you. Make your New Year’s financial freedom resolution a lifetime goal. 

If you are looking for assistance, you can reach out to Encompass Recovery Group to see how they can start helping you today.