A majority of millennials have some form of debt. According to CNBC, the most common type of outstanding balance that millennials hold is credit card debt. As such, it should be your top financial priority to sort out if you want to be debt-free. Although being debt-free is not as easy as it sounds, you can still do it if you make the right financial decisions.
As a millennial, you have a long life ahead of you. If you want to enjoy every moment of it, you should make a better sense of your financial position and make plans to ensure you your future is financially secure. But how do you do so?
Here are some of the top ways to free yourself from debt and adopt a healthy financial lifestyle.
Clear off Your Credit Card Transactions
How many times do you find yourself running up a credit card debt since you could not prevent yourself from making that impulse buy? A credit card sure does make things easier. It is also a great way to build up credit. But you should not use one if you cannot handle it properly.
If you own a credit card, ensure that you pay off every purchase you make on the same day rather than waiting for monthly bills. Once you adopt such a practice, you will find it hard to spend past the budget that you have at hand.
But if you already have accumulated credit card debt, you need first to take inventory of how much income you are spending on your debt every month. You can use the pigly.com debt payment calculator to determine how much time and money you can save by increasing your monthly payments.
You can then create a logical plan to clear your debt and set up a budget that works with your strategy.
Build a Large Savings
If you want to stay out of debt, create a sizable savings account. Savings help you deal with any unexpected expenses. If anything happens, such as an unexpected car breakdown or hospital emergency, you can sort the bill right away without much pressure.
It also helps you mitigate any long-term expenses, such as a home mortgage or your children’s school fees. When you do not have any savings, you may find yourself in financial trouble since expenses may build up, threatening your debt-free lifestyle.
When you live debt-free, you have a better chance of saving more to ensure that you live a financially healthy lifestyle.
Start With Community College
Many millennials looking to further their education tend to consider taking out a loan. But you do not need to borrow money to get a good education. A good idea may be starting at a community college.
You can then get a scholarship or grant to a prestigious university. You may opt to get some additional funding for some specialized programs or even attend medical school. But with the rising student loan debt, it is much better to work your way through college slowly.
Be Mindful of Your Spending
Living a debt-free lifestyle does not mean that you should spend your money more freely. Always set a limit on how you use your finances. Live within your means to prevent going back into credit to make ends meet. Ideally, work only with a budget and be strict about it. Be frugal with your spending and learn to save more.
Even though millennials are stereotyped as having plenty of loans under their belt, you can live a debt-free lifestyle. It will help if you track how you are engaging with your finances to come up with a clear plan on how to clear off your debt. You can then adopt the above measures to future proof your finances and prevent you from going back into credit.