It is possible to live life without any debt free. People with different age group may have different financial backgrounds and different financial choices. It is easy to get into debt if you can’t control your spending. There are many methods to cut spending, pay back debt free or avoiding it all together.

The important thing is to select a financial system that works for you. Know your strength and weaknesses are and work accordingly.

Here are some super awesome tips that will help you learn about spending a debt free life

1.Try to build a large savings

It is difficult to work towards a sizeable savings account, but it is also the most important way to stay out of debt free. You can start preparing for savings by thinking about saving for unexpected expenses like medical bills, car repairs or pop of sudden travel expense.

Saving is also essential for long term expenses which you might not be planning for yet such as for buying a new home, retirement or child’s education.

Not having hefty balance in your savings account, life’s unexpected costs can pose a threat to your debt free lifestyle. If you want to live your life without taking up loans, start building your savings.

2. Pay off credit card bills timely

Living a debt free life doesn’t mean living exclusively on cash all your life. Credit cards have their own merits, but you need to learn to use them wisely and carefully. A credit card makes certain things easier such as traveling, renting a car, and making hotel reservations.

Using credit cards will also help in adding up good reward points. But if you know yourself that a credit card payments is something that you can’t handle or remember, then don’t get one. Otherwise, don’t be afraid to use credit cards to take advantage of reward points and cash backs.

The strict rule that you need to follow while using credit cards is that you will pay your bills on time. Set up reminders, so that you never forget due date of your bills.

3. Buy a used car

It has been observed that most middle class people can’t afford to buy new cars outright, so they may opt for car loan. Taking up a car loan means paying high interest charges and inviting debt free. Well there are many reliable used cars out there, so do research on best car models and find a good mechanic that can give you best judgement and buy the vehicle.

Can I get loan for second hand car in Canada? Yes, it is possible to obtain a payday loan in Canadato finance the purchase of a second-hand car. Payday loans are short-term, high-interest loans that are intended to be repaid on your next payday.

4. Follow the 50/30/20 rule

This is the ultimate money plan that will help you know about saving and spending money. Go by the rule and allocate 50% of your income on your needs, 30% on your wants and rest 20% of your income should go towards your savings account.

Spending less than this allotted percentage would leave you with more money for your financial goals.

5. Read before you agree

Read anything and everything before getting into it. When applying for a credit card, look over the entire application and take note of the interest rate.

If the interest rate has a variable rate, it means it can change without notice when the prime rate increases. So, you should know about this beforehand.

6. Prioritize

There are several methods to pay off debt free. These methods are highly recommended by all financial experts. But each financial method of paying off the debt free varies.

The main idea behind each method is to prioritize your bills by paying off secured debts first like auto and mortgages. Afterwards, you must try to pay off unsecured debts like student loans and taxes.

Next, you should pay off unsecured debt free that are likely to appear on your credit report and finally all those unsecured debt free that are least likely to go into collections.

7. Set up automatic payments

Avoid missing out on any payments by setting up automatic payments through your bank or through the creditor. This way all your payments are scheduled in advance and then there is no need to worry about missing a payment and harming your credit score.

8. Create a budget

By creating a budget you can get to know about where your money is going and also help you to know where and how you need to cut down on any unnecessary expenses. You can use a spreadsheet or an online app to manage your finances.

9.Live within your means

Calculate your debt free to income ratio and figure out if you are living within your means. To find this, you need to add up all your monthly debt payments and divide that by your monthly gross income.

You need to understand that your debt-to-income ratio needs to be below 10-15%. Anything over a 43% debt-to-income ratio is a red flag to potential lenders which shows that you are living beyond your means.

10. Research

It is important that you should do your research on all loan options and find possible negative consequences before you make any big financial decisions.

You can even make a comparison of all other options so that you can easily find which is best for you.

11.Use your resources

If you are in debt, there are many resources and programs that you can find to help you such as repayment plans or loan modification plans.

Also you must educate yourself by reading various personal finance books and blogs. You can learn about money and its management.

12. Never ignore collection calls

Ignoring collection calls won’t be a solution to your debt problem. If you ignore collection calls it will make your situation even worse by further damaging your credit score. Therefore, it is best to acknowledge the debt and explain why you could not able to pay it. The debt collector or the credit card company may be able to help you with the interest rate or payment due dates.

Is payday loan a good debt? No, payday loans are generally not considered good debt. Payday loans often come with high-interest rates and fees, making them an expensive form of borrowing. The short repayment terms within a few weeks, can lead to a cycle of debt where borrowers struggle to repay the loan on time and end up taking out new loans to cover the existing ones.

13. Earn more, spend less

Try ways to increase your income and curb your expenses. Consider putting in extra hours at work or getting a part-time job. Track your spending and try to keep it as low as possible.

14. Use self-control

If you really want to live a debt-free life, you need to practice self-control. You need to totally avoid impulsive purchases and stay away from buying something just because they are on sale. You need to be clear about your choices and purchases within your budget. Try to buy things that you can afford by paying cash.

15. Be confident

People who believes in their budgeting and savings plan doesn’t care about what others think of them. They are fine with driving an old car, because they simply cannot afford to buy new one.

Taking vacations just to show off pictures on social media are needed to be completely avoided with confidence. When shopping look for price tags and not only at brand names if you want to save money. Be confident and tryst your budget.

16. Be goal-driven

Debt free living is a goal. So if you want to accomplish this goal, you need to work with that objective in mind. People with goal-driven approach have specific, measurable, achievable and relevant ideas in their mind that have an expiration date. Accordingly, they figure out what they want to do and make strategies to make it happen.

17. Don’t be materialistic

The person who is determined to get out of debt knows that money cannot buy happiness, so they don’t fall into a trap of buying unnecessary stuff. By practicing this approach, the person can easily become content and happy with what they have and are not seeking to buy happiness with materialistic things.

18. Earn interest instead of paying it

The problem with debt is that people may waste their money by paying interest. It eats away your finances. So, instead of paying interest, make your money work for you by investing it properly.

Thanks to the magic of compound interest, your investments will grow over time. This would mean that the money you would have been paying toward interest is now earning interest instead of multiplying.

19. Travel without credit

It is not necessary that you need to book a hotel or rent a car with a credit card. You can book a hotel by depositing cash. You just need to call around to find right hotels and car rental options.

20. Build an emergency fund

Many people use their credit cards to sort an emergency and handle an unexpected expense. But that is completely a wrong approach, as you may put you into debts. Instead, you need to make a habit of putting a portion of your monthly income towards an emergency fund. This can be a more sorted way to handle emergencies in life.