How to become debt-free:Improving Personal Finance
How to become debt-free?

Living a debt-free life can bring peace of mind, financial stability, and greater opportunities for long-term financial planning. Improving your finances is a journey, and it starts with making a commitment to change. Whether you have a small amount of debt or are struggling with a significant amount, taking control of your finances can be a challenging but rewarding process. By adopting a budget-friendly lifestyle, reducing unnecessary expenses, and utilizing debt repayment strategies like the Snowball Method, you can work towards becoming debt-free and securing a brighter financial future. Living a debt-free life requires discipline, patience, and determination, but with the right approach and support, it is achievable for anyone.

Tips and Advice to Improve Your Finances and Avoid Debts

1. Avoid Impulsion

One of the things that throw us into our own graves is our impulsion. Whenever we shop or see interesting things, we buy them though we really don’t need them. For me, it is fine to buy your wants. However, if you will loan or use your credit card for things you really don’t need, you are making more debt. You are digging your own hole. And you will go deeper if you can’t stop or avoid impulsion.

2. Save Money for Rainy Days

It is imperative to save money. An emergency fund is a must-have if you want a debt-free life. Some people would think of this as weird and might think that you are so pessimistic that you think of worse scenarios. But you got to think of what would happen if an emergency arises. Where will you get the money? Are you going to loan/ borrow money again? Save small yet consistently. You should have at least three to six months of living expenses saved up.

3. Live a Frugal Life

Living this kind of lifestyle is quite hard to attain especially if you are used to spending luxuries or having extravagance your whole life. Being frugal needs discipline. This means that you are going to buy things economically and avoid wasting them. There are lots of ways to do this. These include budgeting, using vouchers when shopping, stopping going out to eat, cutting subscriptions, and many more.

4. Look for Other Income Streams

A lot of people are living more than their needs. So the tendency is they borrow money. If we can’t avoid some expensive hobbies or subscriptions, find another income source that will help us pay for those extravagances. You can get some part-time jobs or even start a side gig to have extra cash.

5. Track Your Progress and Reward yourself

Always check and track your progress. Isn’t it nice to see that you are making it? And don’t forget to reward yourself. What more satisfaction can you get if you hit your goal? This, it will give you more pleasure and motivation to keep you doing it for a long period of time.

Ways to Pay Debts

From the simple advice above, you can become debt-free. But what about if you have a lot of debt? How are you going to pay for those? I understand that paying debts feels like forever because of the compounded interest. There are many popular methods to pay off debt, but I want to share the 2 most popular methods.

1. Snowball Method

One of the popular ways of paying off debt is the debt snowball method. This method is by paying and focusing on the balance from the smallest to the largest regardless of the interest rates. As you pay your small balances, that frees up your money to pay for your larger debts.

Benefit: Quick Satisfaction

How Does It Work?
  1. List down your debt from smallest to largest according to their balance regardless of their interest.
  2. Attack the smallest debt first while making the minimum payments on the rest of your debts.
  3. Repeat the method until you completely paid all your debts

2. Avalanche Method

This is the opposite of the Snowball Method which focuses on the interest rate from highest to lowest regardless of balance.

Benefit: Pay debt faster and pay less interest rate

How Does It Work?
  1. List all your debts by their interest rates from highest to lowest regardless of the balance.
  2. Aggressively pay the debt at the highest rate while making minimum payments on the rest of your debts.
  3. Repeat the method until you completely paid off all your debts.


Living a debt-free life is a desirable goal that requires effort and dedication. Improving your finances involves creating a budget, reducing expenses, increasing income, and making smart financial decisions. It is essential to prioritize debt repayment and avoid incurring new debt. Developing healthy financial habits, such as saving, investing, and avoiding impulse purchases, can help you achieve financial stability and live a debt-free life. By making small changes and sticking to a budget, you can gain control of your finances and secure a brighter financial future.

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