How to be debt-free by the age of 30 and avoid debts thereafter

Nothing can be worse than leading a life with the burden of debts, especially if you are young and have a lot of debt. It can damage your financial future.

What could be better than paying off debt early and becoming debt free sooner? I mean at the early stage of your life, at the age of 30!

A lot of people are looking for ways to pay off debt early to get back a grip on their finances. They want to secure their financial future.

Unfortunately very few are able to do so. Because dreaming only about a debt-free life is not enough, you have to take some steps to become debt free at the age of 30.

You should be diligent when it comes to becoming free from debt clutches; you shouldn't delay.

Have a look at the steps by following which you can pay off debt earlier and secure your financial future.

Step 1: Pay off your existing debts first to become debt-free at the age of 30

You need to make a solid plan and work on that to become debt-free by the age of 30. You may have to exercise financial discipline and prior planning. To repay your existing debts, you need to try out the best debt-free option.

Talk to your creditors to negotiate

If you have fallen behind on your monthly payments, don’t run away from the situation. Try to face the creditors because they are the best persons who can give you the solutions. Try to negotiate with your creditors. Tell them about your financial hardship.

You may get lower rates and affordable terms and conditions on your credit card accounts.

Make bi-weekly payments towards your debts

The process of paying off debt applies to both secured and unsecured loans. Both credit cards and mortgage loans may take a toll on your financial life.

Make a payment every two weeks towards your loan. You may not see a drastic change in your expenses, but you can see changes in your savings with time.

Make one extra payment annually

The easiest way to pay off debt early is by making an added payment annually.

For example:

If your monthly payments are around $1000, make sure you pay an extra $1000 anytime during that year.

You might get a tax refund during the year or a bonus and utilize the money in meeting your debt obligations.

Consolidate your private student loan debt

Student loan consolidation helps to lower interest rate on the new loan. You can take out a consolidation loan from banks or credit unions.

The creditors will check your credit score, annual income, savings, and the college degree before approving your loan request.

If you don’t qualify the requirements, you can apply with a cosigner to get a consolidation loan.

Pay off your credit card debts by following the snowball method

If you’re willing to reduce your credit card debt, the debt snowball method can help you do it. For this, you have to list your debts from lowest outstanding balance to the highest one.

Now, you have to make maximum payment on your card with the lowest outstanding balance.

Along with this, you must make minimum payments on the other cards.

This way you’ll soon be able to repay your first credit card. Continue with this process till you pay off all the debts.

Step 2: Save more to avoid falling into further debt after 30

After getting out of your current debts, you need to avoid further debts throughout your life. To do so, you have to live a disciplined financial life to save enough money. Your savings will help you to meet a purpose without incurring debts.

Make a list of your expenditures and plan a budget

Most of the young people don't like budgeting, but it will make you financially organized. Try to note all your expenses in a notebook, no matter how small it is.

Thus, you can track all your expenses and can monitor your savings as well.

You can also remember where your money is going. It also helps to live and spend within your means.

Eliminate extra expenses

Cut down all your unnecessary expenses. Otherwise, you’ll never be able to save a decent amount into your savings account.

For Example:

If you’re paying so much on the Internet, there is no need to spend money on movie theatre every weekend.

Concentrate only on your needs and not on what you want.

You should drop unnecessary costs to make a positive effect on your budget.

Set short-term goals

Set small financial goals first.

For example:

You should work on paying off student loan debts or saving money on a regular basis. Setting short-term goals will help you to gain confidence.

Living paycheck to paycheck will never give you financial security at any age. Your life is full of uncertainties; you should be prepared for this.

Plan long-term goals

After achieving short-term goals, plan for big things like buying a house, a car, saving for retirement, and planning a vacation.

Remember, by achieving short-term goals, you can gain a confidence to achieve long-term goals. So, planning is very important.

Make a plan to save $10,000, $50,000 or $500,000 dollars first to achieve millions of dollars in the future.

Say “NO” to credit cards

You love shopping and equally love to swipe your credit cards to buy things. But do you pay the bill on time?

Remember, using credit cards unnecessarily is dragging you to further debt traps. Because using a credit card is not enough, you have to make the payment in full and within time. If you don't do that, you will fall into credit card debts.

So, control yourself from using your credit cards as much as possible.

Try to make a habit to carry cash while shopping. Thus, you can control overspending and can track your expenses as well.

Step 1: Build a shield to avoid surprising debts throughout your life

Working hard can make you debt-free at the age of 30! But, what about the expected expenses that can come in your way surprisingly?

You can lose your current job or you can face financial difficulties for a certain time. Also a divorce, a car break down, sudden illness, and natural calamity can happen any time.

So, being debt-free at the age of 30 is important, but building a shield for staying away from the future debt is also significant.

What should you do?

Grow an emergency fund

Since most of the young people don't have enough savings, they have to take out loans to manage an emergency. Job loss, illness, unemployment, an accident can happen anytime. To survive,

you need to have enough money; otherwise, you need to take out loans or swipe your credit cards.

An emergency fund can help you overcome the situation without falling into debt.

So, save at least 3-6 months of savings in an emergency fund.

Find out extra income resources

Extra income can give you the opportunity to save more to become financially well-off. It also helps to repay your debts. So, search part-time jobs available according to your qualification.

You can also start a home based business or work as a freelancer.

Be financially educated

Young age is the perfect time to gain financial knowledge. It will help you to manage your hard-earned money efficiently.

Moreover, you can stay away from mistakes that invite debts.

So, read financial blogs, magazines, and articles to become financially educated.

Getting out of debt and building financial security at the early age is certainly tough but possible.

With some little effort and determination, you can achieve it. You should focus on your plan and have faith in yourself. But, you need to make realistic plans. Otherwise, you may lose your interest and get demotivated.

Try to give importance to your priority first and then work on your plan. You’ll be successful in becoming debt free at the age of 30!
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