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How to Live Debt Free

Living in debt can be stressful and can put unnecessary pressure on families that causes more than just financial problems. About half of the United States population does not have enough money in their accounts to pay of credit card debt each month. That is not even taking into account car loans, student loans, house loans or any personal loans they may have. It is possible to break the cycle of debt and live a debt free life with hard work and determination.

The first step to living a debt free life is to save up an emergency fund. While it is best to save up three to six months worth of expenses, start by saving up $1,000. This is you safety buffer so that the next time an emergency comes along you do not need to put it on your credit card going further into debt.

After you have saved up money in your emergency fund, you can start paying off your debts. Any additional funds you receive above your cost of living should go directly to paying down your debts. Start with the smallest debt you owe first, like a credit card, and then work up from there to your largest debt (probably your house).

Once you have paid off a credit card, try to get rid of it. It is best to live without the temptation and ease of being able to put all of your transactions on there. Instead use cash or a debit card when making purchases. While it is a significant challenge and all members of the household must be on board, living debt free creates peace and freedom. Financial peace and freedom allows you to experience less stress and use your money the way that you want to see it used.