How to close your debt and win financial freedom?Edit

Think it for a while: nobody would happen if you won't take any action to change your situation. It is equal to doing a business, starting a business venture with your friends, in shortcut: taking action preceded by thinking. If it sound to you, "oh I've got so many debts" you should first start to think, what were the causes for this situation and in next step: how to resolve it (equal = getting money). If it was your compulsion spending you've got a reason on what you should take more care about, what techniques you should use to stop those hazardous action in which you involve in moment when you're not fully capable to handle them.

[1.] Review your financials in the first place.

Do you're subscribing monthly bulletins or you've got monthly payments which are "so very necessary" that you can't go ahead without them. Think it. Think about all those things for which you're paying every month and which take your money out of pocket. Start for very small things. Those subscription of newspapers for $40 could go into $480 in a year (put your currency). Nice sum, huh? You would like to have them at this moment. Probably you don't need those newspapers, another reason is that they're probably available free on the Internet (I'm not talking about magazines, but the knowledge that is inside of them; on other hand you can probably find them on internet too, but I'm far for persuading piracy here) just to get the point: you don't need them, at least to the time pay your debts out (you would later discover that you don't need them generally).

Next, as an example: you've got contact lenses – you need them and must to have them. You're getting 3 months shipment and you're credit card is billed. Yehoo [ :-) ], but stop here. You're paying $40-80 per 3 months for tools which you can get easily on eBay for 40% of the price (* the same product!). Who is cheating you? Is it nice to get those $200 a year back? You want to work 3 or 4 days extra in year or you would like them to have free, just by clicking 1 minute manually on eBay? It is the very best way of thinking about this subject: how many days I would get free only for applying those methods.

Next thing: bank account – you're paying for a premium account which has got so many bonuses that normal account doesn't. You're paying $25-50 monthly when you could have a free account. Yes, but I need it. No, you don't need it. Free account offers the same service with 1 reason: you don't pay for it (think it for a while). Even if not, there are some extra services that you can buy in a "outside" company, not a bank (and in most cases terms are much greater than you would even think off). Let's take +25$ back each month, it gives: $300 dollars per year (more)!

You would like to probably consider your montly payment bills for telephone. Do you really use those 500 minutes and 1 500 (or unlimited) packets of text messages. Do you really need it? Number? Yes, change it. Paying $40 as basic tariff (and believe me it's never "only" $40), it goes to $60 or rather $80-100, you're calls. They're all summing magically up. It's never the basic tariff. If you don't believe me ask your friends how much they pay. Do you really need this? Buying $50 card / per 3 months is enough for 90% of people (not saying that all). It gives you an average return of $60 per month, $720 per year! BIG NUMBER HERE!

TV? Do you need all those programs. I never watch TV, just Internet. Furthermore, from age of 16 I've never paid for the internet (even if I've had SKY BT 16Mbit/s; fastest one; I've never paid, because I have never received any bill [when was in UK]; I think the reason for it the service was never activated, because I didn't used the TV decoder and the "activation man" couldn't done it, because I've had only 1 power socket in my room [2nd was after wardrobe]; paid only for BT socket). On the other side: is in you're neighbor a unprotected wifi connection ("public network")? Turn it off, you don't need this: +$60 / month.

In the final result you can come to a conclusion that you're working half a month for your bills and for the rest you can only drink and work for next month. It's not far from the truth. Those examples are only sample situations on which you can focus to reduce the payment. Let's count, how much we've saved by only reducing unnecessary (the one which you could handle without):
    → BULLETINS $40 / per month + SOMETHING ELSE $40 / month + PHONE $60 / month + TV 60$ / m. + BANK ACCOUNT $25 / m. = $225

Well, that's multipled by 12 months: $225 x 12 = $2 700. Good vacations? Debt free? $2700/50$ (sallary per day "clean" after taxes; put your own there) = 54 days WORK FREE – PRICELESS.

I'm not talking about the food, reducing accommodation fee (if you're renting) [in reality: moving to a cheaper room / home, with somebody in the room or taking smaller room, taking with friends whole home; just ideas] (other ideas in the next chapter of article, please read).

Idea to repay your debt is to sell your personal items which you're not using / are not worthy to keep them. You can put them on eBay (see: [eBay tip] (it would be helpful with selling)).

I've got a feeling that those kind of work (analysis) do companies which help to reduce card debts for big money.

Well, if you're a middle class person – you've got the same problems, but on a much "higher" scale (it's even worse, stop being proud from this). IN common 1 rule exists (parkinsons rule): "EXPENSES RISE ACCORDINGLY TO THE EARNINGS". To put it in one sentence: you would always have less than you can spend", but only the "toys" would change, with the rise of earnings or (not far from the truth): "you would always spend what you have, according to your earnings".

What it really matters.

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It doesn't matter how much you earn. What really and only counts is: how much you keep.

Spending is easy, everyone can spend, but what distinct great people from those who perform poor (or average) is the ability to save. To live on far below their financial abilities (capacity, earnings).

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[2.] Altitude toward money.

You should have a thinking that every dollar is priceless and it's giving you towards your financial freedom. Point is to set yourself a longterm, visible end-goal which would motivate you to work. It could be, repaying your mortgages or getting to a 6 point figure. It doesn't really matter, what matters is that it needs to motivate you in a sufficient way.

Before buying anything small, medium or big (in price terms) ask yourself: do I really need this? DO I REALLY NEED THIS? IF it's necessary to have it, can I go by – without having it or even: how can I get this without buying it. Maybe you can borrow it from somebody? Next question is: how can I create this (or get the same effect) for available resources I have? If it would be used only once, is it worthy buying it or can I buy used?

Never buy compulsively. With bigger shopping (or buy) give yourself at least a weak (7 days) to think it through. Maybe the buyout which you're wanting to do is not so luxurious as the emotions firstly suggested? Think about the bad sides, too – in the first place.

Millionaires (by the way) never buy new cars. They wait the magic time 2 years and then buy the car, when it's on warranty and quite new. It's 20%-35% cheaper than new, from the salon and guess what they do with saved money? It's still a very new good car, through.

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This exercise would give you kind of mental "vision" over money terms, please do it.

You're living the country and you want to sell in a month period all items and everything which you've got to this moment. How much would you get for selling all?

Please make realistic and honest prices – you're doing this exercise only for yourself. It gives an answer to very important question: how much am I really worth? (notice: you add up you're savings on bank account)

This exercise gives you exact value. You start to see that things you perceive as valuable like clothes, personal items are penny-on-dollar worthy if you would even find for real anybody who would to buy them (they're worth: pennies on the dollar). How much are you really worthy?

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[3.] Your plan for tomorrow, to become financially independent & precious tips.

START from this paycheck, every month (or every week) put aside 20% of your earnings (of the top).

Put those money on a special bank account where you've got difficult access (done by yourself). Don't take credit credit card for that particular account. Best is to set a "constant money transfer" on your bank account (probably similar to those who you have set to pay your every month bills).

TIP: Never gamble – NEVER gamble.
As you remember parkinsons law – your expenses always meet the income. They only way to break that pattern is to save of the top part of your earnings. If 20% is for you too much or even impossible, start from 1%. Nobody won't tell me that he can't put aside 1% of his paycheck. Well, it's not about the amount of money you would put aside, but about habit. Remember the part about habits: bad habits are easy to make, but hard to live with, whether good habits are hard to develop, but easy to live with.

Even if this idea seem to be funny and really "longed" in distance (time), but after 3-5 years you would be much wealthier. I can grant you that, but it's not about that – you would become much smarter in the financial terms. All that "emotional hunger" would disappear, or at least weaken. You would start to feel calm, good, satisfied with yourself, without any fear of lack or shortage of money. You won't be forced to work in a job which you probably don't love. You would have time to think through everything. Magic would start to happen.

As Brain Tracy said: "rich man jokes are always funny".

Earned money you would learn to don't "squander", spent on right and left. You would start to save everything you've got. From new income, put 50% of it aside. You've got the remaining 50% to spend!

All investments in which you want to engage, think trough 2-3 months, maybe they're not so good as they appeared at first (emotions)? Where I'm not telling not to invest money.

You would go on a way to become financially independent by implying only this 1 little habit. You can then (when you would get sufficient funds) buy already established or build your own business (smart thing to do); or even invest in somebody who would do it, by getting shares in the project.

Next thing, is that in time you would start put aside more and more and thanks to this habit your earnings would rise, because you would stop to fear loss of work and start to think and act independently with more confidence. In years you would start to put 40,50% or even 70% of your paycheck every month. It would become an irresistible habit.

EPILOGUE
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You don't want to wake up in your 30's and say to yourself: 'I've got nothing'? Aren't you?
Where if you won't put aside each weak/month and you won't do something extraordinary (will you? low chances if you haven't done anything like that before; face the reality) you would end up like many people who are in their 50's and 60's with no savings, dependent upon pensions and retirement plans with no money to dispose on their own (or social assistance clubs). It's very humiliating experience, believe me. Skipping the cry, yelling and all the negative thinking which causes severe pain and stress.

Think about your finances now and treat them very seriously, because they can determine your future or bury it.
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TIP. Don't borrow money to anyone and don't borrow from anyone. Just STOP, no questions, very good advice. If somebody wants to borrow 5pln just give it to him (but no more), but never borrow. No reasoning why, just don't.

Remember that the best and only important investment is in yourself. Investments of time and money which could enhance your earning ability. Investment of your time and effort to becoming best in your chosen field – those money are almost never lost, but invest no more than 5-10% of all your money a month. It could be a book or an online course.

If you're smart enough you would find on the internet almost everything for free. If not you've got forums where are lots of competent people. You should start to search also those people in your environment (you don't even imagine how many are people who you don't have a clue about their abilities and how useful are they/may be in your plans). You've got no excuses.

Remember one thing: old people aren't unhappy, because of their age, but of the lack of money which blocks them all options (like travelling). Consider this very seriously. Remember to put aside on retirement and start to put aside those 20% from now on. Tomorrow, as they say is the most "busy" (laborious) day. Would you accept the challenge to make an action from this paycheck? Decision is up to you. Upon on the end nobody cares about you, especially when you're becoming older and older.

START TO PUT MONEY ASIDE FROM THIS PAYCHECK.

NEVER HAVE EVERYTHING IN 1 PLACE (MONEY) (it could be bank account). Split your wealth on various investments, banks or socks.

Update 2011-03-06: NEVER carry with yourself more than $50–$200 (you decide). If you're suffering on impulsive buying: never carry with yourself credit cards (debit cards). Leave them at home. Treat this carefully, especially when it's Friday, Saturday and you're drinking alcohol...

Update 2011-03-08: Older people (not only old people) are commonly unhappy, because of the LOW ENERGY they've got and lack of will to do anything, because it's hard and (even) causes pain. You've got all in the article: Extreme Tiredness? Feeling Tired (read it, despite the title).

I wish I had this knowledge before... but "smart pole after injury (hurt)" (polish proverb), more (about me and important information, here: Why are people poor (financially)? [Hint: How to become financially independent for a lifetime?]. Edit

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