Debt Free Living

If you are retired, it is essential that you know how to live debt free. If you are preparing for retirement, it is essential that you are learning to live debt free. We're all in the same boat.

Debt free living needs to become a habit, and we're going to look into how to do just that.

When you live without debt, you will see great things happen. You will have the peace of mind that comes from not owing anybody anything. You will avoid pointless finance charges from credit cards. You will reap the rewards of having spotless credit.

Here's how:

First Get out of Debt

The first step to achieve debt free living is of course getting out of debt in the first place.

The process we will show you (through the link above) is the quickest, most effective way of paying down your debts. Follow it and you will soon know the feeling of being debt free.

The first, most important step in the process of living debt free is to change the way you use credit cards. Use them to your advantage instead of to your detriment.

Change the Way You Use Credit Cards

Living debt free does not mean you will never use credit cards again. You will instead change the way you use credit cards to reap their benefits while avoiding their costs.

One of the huge appeals of using credit cards is the benefits many cards attach to their use. Most of these cards have some sort of point system that accumulate as you use the card for purchases.

These points can be "cashed in" for all sorts of nice things, such as air line miles, gift cards, travel rewards, merchandise or even cash. Different cards have different programs, so you should carefully look into it to find the best one for you.

The cost of these rewards come from the interest paid on any outstanding balance and possible annual fees for the card. The interest charges are really easy to avoid - just don't carry a balance.

The annual fee on the card is also avoidable, but you'll need to do a little homework. There are tons of cards now that don't charge a fee and have a great rewards program. However, if you find a card that has really great rewards you can't get with any other card, and the fee is worth it, go for it.

Make it Automatic

The secret to earning lots of free credit card rewards is to make it automatic. With technology today, this couldn't be easier to do.

The first step is to set up your card payments to pay off your entire balance each month through automatic payments from your checking account. This will ensure that you will never carry a balance and thus, never have to pay interest.

(To really maximize your card rewards, you can set up your card to automatically pay your bills. You may already do this with auto-pay from your checking account. Instead of using your checking account, use your credit card. Because you have set it up to be paid off each month, it allows you to still pay your bills from your checking account, it just rearranges the path. It is a great way to get the most out of your credit card.)

Getting credit card use under control is the most important thing for being able to live debt free. Once you stop paying unnecessary fees and interest on your cards, you can turn your focus to other debts in your life.

Big Ticket Financing

There are some items that are very difficult to purchase without the use of credit. The obvious ones are your home and your vehicle(s). It would be difficult for almost anyone to be able to put up the cash for these big ticket items.

Whether it's a vehicle or a home, the trick is keeping your rate low and your term short. Both of these things are easier to obtain if you can limit the amount you are financing by putting up some cash.

The rule of thumb is that if you can get the financing rate lower than the rate you are able to earn on your investments, it makes financial sense. Keep the term short to reduce the amount of interest you end up paying over the life of the loan.

If you can pay cash or can pay it down early and that is something important to you, go for it. Getting out of debt is a good thing.

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