Three steps to getting out of debt

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One of the biggest struggles we face is debt. Whether it be student loans, credit card debt, or a mortgage, paying off our debts can seem overwhelming and impossible at times. But it doesn’t need to be that way! There are many steps you can take today to get you financially independent {Økonomisk uavhengig} and start saving for your financial goals – whether it be a vacation, an emergency fund, or retirement.

1. Create a budget

First, you need to know where all your money is going. You can use an app like Mint or link up all of your accounts with Personal Capital to track everything from one spot. Once this is done, break down what percentage of your income goes towards fixed costs (rent/food) and variable expenses (entertainment, shopping, etc.) Next, try to reduce these costs by shopping around for lower grocery prices or switching to a cheaper cell phone plan.

2. Make a plan

Now that you know how much money is coming in and where it’s going make an actionable budget. A great way to do this is by using the 50/20/30 rule – which states that 50% of your income should go towards needs (rent/groceries), 20% towards lifestyle choices (entertainment, eating out), and 30% goes towards saving. This ensures that you are getting the most bang for your buck!

3. Pay off your debt

Next, pay down all of your debts. The best thing to do is start with the smallest one and work up to make you feel better about each victory! Once paid in full, put that money towards the next most significant balance (never miss a payment or incur any late fees).

In conclusion, getting out of debt can be difficult, but it doesn’t need to be. The three steps outlined above are simple and easy to follow – they will ensure that you stay on track towards financial freedom!