Home
>
Wealth Building
>
From Debt to Financial Freedom

From Debt to Financial Freedom

The vast majority of working people are in debt. The vast majority of people who are now in debt are always struggling to find better jobs with higher pay checks. As strange as it may sound the more you think about it the more you will come to realise that the more money people make the deeper they get into debt. It almost seems that finding another job with better pay check is not the most effective solution to get out of debt.

These same people are now so weary that they are wishing to be out of debt forever, dreaming to never have to worry about money, craving to be financially free.

As you know, jumping from being deep in debt to having financial freedom is not a small leap at all. To attain real freedom takes concrete planning and self-discipline in taking orderly and progressive steps from where you are now to where you want to be.

Before your finances can actually soar you need to get out of your deep hole of debt first. This should be your first goal. As soon as you are out of debt, you can easily embark your journey to your financial freedom!

Track your daily expenses

The aim for doing this is to know exactly where your money goes everyday. Record every incoming and outgoing penny and evaluate every week how much money you spent on necessities and how much money you could have saved. Was it really necessary to buy those $200 shoes using your credit card? Could you have bought something less expensive with the money you actually had in your wallet instead of using your credit card again?

By recording and evaluating your expenses regularly you will come to see that there actually are ways to reduce expenses and save money! The more money you can save everyday the more money you will have to pay off your debt completely.

Don't rob Peter to Pay Paul

Some people are so deep in debt that they don't know what to do. It is common that at some point they would obtain cash advance on one visa to pay other credit card bills.

Do not go through this kind of "rob Peter to pay Paul" strategy! They usually don't work. Most people are too easily tempted to further use the visa or the cash which was initially intended to pay other bills for shopping. Eventually, they wind up accumulating even more debt.

As you see there is no financial advantage for you in having more than one credit card. On the contrary, the "robbing Peter to pay Paul" strategy would only make your debt worse.

Cut up your credit cards and keep one card (if really necessary) for emergency ONLY.

Now that you are trying to get yourself out of debt and have actually started saving money to pay it off, stick to your plan and stop accumulating more debt. This should be your next goal.

One credit card can be very useful in case of emergency and having one credit card is usually still manageable. But if you are in debt with more than one credit card, in addition to other kinds of debt like car loan, mortgage etc., there will be times when you feel that you are drowning in it.

Choose one credit card to keep and cut up the rest. If you don't trust yourself enough lock up the one card you have in your drawer at home to make sure you never use it for shopping. Discipline yourself not to use it unless in an emergency. Remember: you want to get out of debt, not accumulate it!

Plan Your Debt Elimination Process

The best ways to start your debt elimination process is by first sitting down and making a plan of attack.

Write down each debt that you have: Visa, MasterCard, Amex, car loan and so on. Now, make a list of your debt, starting from the smallest total balance to the biggest.

What you are going to do is concentrate on one debt for the next few months (or years depending on how big your debt is) and start paying off all of them one by one. Focus on the smallest debt first. Write down the monthly minimum payment of the smallest debt you have and add the number up with a percentage of your net income.

Let's say the smallest debt you have is your Visa with the minimum payment of $148. The 5% of your net income is $70. For the next few months (or years) you will be paying off your Visa with the minimum payment PLUS the 5% of your net income, which is $218.

While you are focusing on your Visa, you should pay off the rest of your debt according to each monthly minimum payment agreement. This should go on until your Visa is paid off completely.

As soon as your Visa is paid off, you focus on the smallest debt. Like before, add up the minimum payment with 5% of your net income. But this time add the sum with the minimum payment of your Visa that is already paid off.

If your next smallest debt is the MasterCard with minimum payment of $183, this should be added up with the 5% of your net income AND the Visa minimum payment. The total payment for your MasterCard would be $401. Now that your Visa is paid off you have more money to pay off the rest of your debt faster.

Your next debt should be paid with the money you used before to pay off your Visa and your MasterCard minimum payment. This process should be repeated on and on until all your debt is eliminated.

By doing this you will shorten the years of your debt elimination process.

Manage Your Time and Money Wisely

Time and money is the most precious resources everybody has to actually attain financial freedom. But yet, none of us are taught in schools to manage them wisely.

Now you are in the process of paying off your debt. If you manage your time wisely to make more money to save or help to pay off your debt, you will not only speed up your debt elimination but retirement process and your financial freedom.

Devote some of your spare time to reducing your expenses and increasing your income. The sooner you become debt free the sooner you can save more money and invest to start working on your early retirement process and attain financial freedom.

Everybody knows the disadvantages of being in a debt. But not many of us are aware of the advantages of being debt-free. By being debt-free you have more money to save and invest to prepare for your retirement. And this should be your next goal. Use your time wisely to create extra money and use your extra money wisely to prepare for your retirement and eventually your financial freedom.

Create Passive Income

Now you have paid off your debt, taken up a side job and saved money for investing.

Your next important step to financial freedom is creating passive income.

Passive income is income which requires little or no work at all. Although it is possible to attain freedom just by saving, it will take decades to actually accumulate wealth. Some people never even make it there. By creating passive income you will not just be able to speed up your debt elimination and retirement process but also your journey to attain financial freedom.

The most powerful way to create passive income is by having your own small business or home-based business. This type of business does not require a lot of capital.

Keep your business expenses low and try to put aside a percentage of your net income for saving and another percentage for investing in your own business. Note that for the next 1-2 years you will be experiencing negative cash flow from your new business. But keep in mind that if you persistently invest your spare time, effort and money in your business, you will have all the quality time you want to spend with your family and friends, all the money you dream of for you, your family and even your grandchildren and all the freedom to live your life abundantly.

To learn more about financial freedom and how to achieve it visit http://www.financialfreedomawaits.com.

Resource Box: Dinar P. Wiria-Atmadja is the owner of FinancialFreedomAwaits.com, helping families and individuals achieve financial freedom in years instead of decades. Visit the site here at http://www.financialfreedomawaits.com. You are free to publish this article to your site as long as the article is not changed and the resource box is included.

efficient cleaning crew Lake Forest ..

In The News:

Fake airline texts claiming flight cancellations are targeting travelers with convincing scams. Learn how cybercriminals steal personal data and credit card info.

Discover how iOS 26's new Adaptive Power feature automatically extends iPhone battery life by learning your usage patterns and adjusting performance intelligently.

New TikTok malware campaign tricks users into running PowerShell commands that download Aura Stealer, which steals credentials and authentication tokens.

Gaia Family offers fixed upfront pricing for IVF cycles with unlimited embryo transfers and financial protection, partnering with over 100 U.S. fertility clinics.

The Jetsons Act aims to position Pennsylvania as a leader in advanced air mobility by establishing regulations for hybrid ground-air vehicles.

Fake Geek Squad invoice emails are targeting users with convincing charges and urgent phone numbers to steal personal information and money.

Fox News Digital's artificial intelligence newsletter digs into a robot in Russia that faceplanted, George Clooney's alarm and OpenAI's rivalry with the New York Times.

Major data breach at Conduent exposes personal information of 10+ million people. Government contractor hit by cyberattack affecting Medicaid, child support systems.

Texas startup Janta Power raises $5.5M for innovative vertical solar towers that generate 50% more energy than traditional panels while using just one-third the land.

NASA's twin ESCAPADE spacecraft launched aboard Blue Origin's New Glenn rocket Thursday afternoon from Cape Canaveral, beginning their journey to Mars with arrival expected in 2027.

Learn how to set email reminders on iPhone and Android so you never forget to reply again. Simple built-in features help you stay organized and on top of messages.

Discover how Apple's passkeys revolutionize Mac security by replacing vulnerable passwords with biometric authentication and encryption for ultimate protection.

New survey reveals 78% of parents fear AI scams targeting their kids, yet nearly half haven't discussed these threats. Learn why this dangerous gap exists.

Chrome now autofills passport and driver's license info automatically. Google's latest browser update adds official document support with encryption and user control.

Scammers impersonate Department of Veterans Affairs employees claiming veterans owe money, but real VA communications only direct to VA.gov or official channels.

The AltoVolo Sigma hybrid-electric aircraft flies 500 miles at 220 mph while operating 80% quieter than helicopters, featuring safety systems and compact design.

Google search scam alert: fake customer service numbers can give scammers remote control of your phone. Learn how to spot these traps and protect yourself.

Electric vehicles overtake gas cars in total CO2 savings after just two years of driving, with emissions benefits growing over time as power grids get cleaner.

Louvre Museum reportedly used "Louvre" as password for surveillance system during $100M jewel heist. Learn how weak passwords put even famous institutions at risk.

Bipartisan AI jobs bill from Sens. Hawley and Warner would require companies to report AI-related layoffs and hiring to Department of Labor quarterly.

Joe A. from Shelton, Connecticut, lost $228,000 to a ZAP Solutions cryptocurrency investment scam after his divorce, highlighting rising online fraud.

AI-powered autonomous trucks from Waabi and Volvo target U.S. freight driver shortage with Level 4 self-driving technology and NVIDIA computing platform integration.

Survive flight disruptions with expert travel tips: Book early morning flights, download airline apps and know your refund rights during service cuts.

Apple's iOS 26.1 update delivers major security fixes, performance boosts and enhanced privacy controls for your iPhone. Discover why updating now protects your data.

Russian hackers use fake CAPTCHA tests to spread dangerous malware targeting governments and journalists. Learn how to protect yourself from these deceptive attacks.

From Debt to Financial Freedom

Wealth Building