Leading a debt-free life in a world that’s heavily reliant on credit and carrying debt can be tricky. Most people strive to avoid and eliminate debt throughout their adult lives, but it’s much easier said than done if you’re living on a relatively small income or trying to make ends meet from paycheck to paycheck. If you’re in search of a debt-free life that keeps you free from the chains of financial burden, these are five important steps to take.


1- Pay Down Your Credit Card Balance Immediately


Contrary to popular belief, you don’t need to exclusively use cash to steer clear of debt. While using only cash is an effective way to stay debt-free, using your credit card doesn’t have to be a stressful experience if you make a habit out of paying down your balance as soon as possible. Same day is preferable, and you should always avoid waiting for the monthly statement to arrive before paying.


2- Put Your Tax Refund to Good Use


It’s easy to fixate on splurging your tax refund on a vacation or high ticket item, but it could also be a chance to pay down outstanding debt. Whether you’ve been ignoring your debt entirely or making small payments to keep debt collectors off your back, your tax refund can be the key to eliminating your debt once and for all. Also, you’ll enjoy the benefits of being debt-free for much longer than you would enjoy an impulse purchase.


3- Live Within Your Means


It might seem like an obvious piece of advice, but most people who carry at least one form of debt are not living entirely within their means. To put it simply: you should always think realistically about every single financial decision you make. Assess your needs vs. wants before every purchase, and always shop around for the best possible deal before swiping your debit or credit card. Keep in mind that life is not free, and it’s okay to spend money. However, you should always consider your means before spending said money.

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4- Find a Credit Card That Works for You


Owning and using a credit card is a normal part of the world we live in today, but some credit cards are more practical than others. Some credit cards have more restrictive repayment terms, higher annual fees, ridiculously high-interest rates, and other pitfalls that make them more of a financial liability than anything. This is why it’s important to select a credit card that works for you. Likewise, you should always use it responsibly as if it were real cash by only opting for purchases that you can pay off, keeping a low balance, making payments as early as possible, and more.


5- Invest More into Your Debt Repayment Strategy


Lastly, one of the most important steps toward living a debt-free life is making gradual investments toward financial freedom. Maybe you currently only invest 5% of your income toward debt repayment, but investing 10 or 15% instead could put you on the fast track to eliminating your past due balances. If you’re looking to get the debt paid down as easily as possible, make sacrifices within reason to bulk up your debt repayments.