Becoming debt free isn’t an impossible task. It’s just a matter of breaking it down into milestones. Freedom Debt Relief has outlined three important milestones to help you get out of debt.
These milestones will help you remain focused without becoming overwhelmed.
Short-Term Financial Milestone
Short-term milestones consist of practicing financial discipline. Without financial discipline, you’ll never reach your financial milestones.
For these short-term milestone, Freedom Debt Relief has 3 goals:
1.) Budget: Work on a budget that has you spending less than you make. You’ll find this difficult to do at first but unless you are living near the poverty level, it will eventually become easier.
Many of the items you’re buying now aren’t essentials. It’s likely some are even impulse buys. Impulse buys are more often unnecessary and can be cut out. Removing impulse buys alone will have a drastic effect on your savings.
2.) Emergency Fund: Once you have a budget that you’re sticking too, having money that you can save each month almost seems to fine in line automatically. The cash freed up from unnecessary spending can go towards an emergency fund.
3.) Credit Cards: Don’t allow balances to carry over on high interest rates.
Mid-Term Financial Milestone
Life Insurance And Disability Income: If you’re married and have children, you want to make sure they are well taken car in the event something happens to you.
Life insurance pays out for those left behind. To figure out how much you’ll need, simply calculate how much it requires to keep the family going each month.
Disability insurance is different from life insurance. While life insurance will payout in the event of your passing, disability insurance is there to provide an income in case something physically happens to you and you’re no longer able to work.
Life and disability insurance can get a little involved. Freedom Debt Relief could help you navigate these waters while also factoring in your ability to pay down your debt.
Student loans are the second big area to consider for a mid-term financial milestone. You don’t want 80% of your original student loan hanging around at this time. Not only will it be getting close to the loan’s term date that requires full payoff but you’ll still be paying a tremendous amount in interest.
Set a target date and amount for your student loans. Then work regular payments into your budget that can hit your target.
Long-Term Financial Milestone
This milestone is all about retirement planning and ensuring you can hit your retirement goals.
Retirement planning means figuring out how much you can live on per month or how much you want to live on per month. From there, you work backwards to determine the amount needed to save each month. Your plan will also project when you can retire.
Retirement planning can get involved and it’s best to speak with a Certified Financial Planner when establishing your retirement goals.
While Freedom Debt Relief isn’t a retirement planner, they could help you get your debt paid down so you can begin putting together a solid retirement plan.
If you’re ready to get the jump on paying down your debt, call Freedom Debt Relief at 800-544-7211 to speak with a credit counselor.