• Lionel Lye

Discover The 5 Secrets To Living Debt Free

Do you want to live debt-free? In Malaysia's consumer culture, that may seem to be a quaint idea to some. But as we see the number of foreclosures and bankruptcies rising, people suddenly ask how to live debt-free.

There is something beautiful about having no bills other than the ones you accrued that month. This article explores five ways to live debt-free.

1. Distinguish between what you need and what you want. It would help if you had food, shelter, clothing, and depending on where you live, transportation. You want a video game system, a high-end stove, etc. Even within the needs category, there are differentiations between products. For instance, you need food, but there is a difference between been soup with a little bit of chicken for flavoring and expensive seafood. Figure out what the minimum you need to live is and put all other items in the want category. After you have paid for all of your necessities, you can purchase the things you want most.

2. Pay off your debts quickly. When the objective is to live debt-free, you have to get out of debt. So, that means accelerating your debt repayment schedule. If you are supposed to pay RM250 a month on your credit card, cut into your wants budget and pay RM350. Even paying an extra RM200 a month on your house payment can shave years off the amount of time you need to pay.

3. Learn strategies to live frugally. If you are used to spending RM350 on family groceries, make it a game, budget RM275. You'll learn to buy generic, buy cheaper cuts of meat, and learn to do without expensive pre-packaged food. You will also find that you are looking for creative ways to prepare food, which could lead to tasty new recipes gracing your menu. Learning to live frugally can bring a lot of fun into your life. That's one of the advantages of learning how to live debt-free.

4. Put away money for emergencies. One of the reasons that people get into debt is because of an emergency. For instance, an unexpected surgery can put you back above RM500. Even if you have medical insurance, if you still do not have medical insurance, please contact us ASAP. If you met with a car accident, you could end up needing to put a couple of thousand ringgits into it. So, having money for a rainy day is an essential step in the live debt-free lifestyle.

5. Teach your children good money habits. One of the advantages of a debt-free lifestyle is that it teaches your children good money habits that they will take into adulthood. Don't teach them deprivation. Instead, show them the benefits of being debt-free. Because you are not paying costly interest payments, you live better than you would if you bought everything on credit. Make sure that your children see the benefits of your live debt-free lifestyle.

So, those are five tips on how to live debt-free.

If you have yet to get yourself a medical insurance, kindly contact us today.

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