What Are The First Steps to Financial Freedom?

by - Wednesday, January 24, 2018


Money has been described as being like oxygen; in that it’s absolutely essential yet we take it for granted until there’s not enough of the resource. Indeed, similar to oxygen, when we don’t have enough money we feel and often take action out of sheer desperation. This article faces the fact that a lot of people, right now, are enduring a financially tough time as a result of the general economic environment, but in particular, the credit card exhaustion as a result of the festive season. Whilst there are a number of factors within the concept of financial freedom which has been defined as having both the time and money to live the life you desire… in this article, we’re going to focus on the very first step to financial freedom - which is to get out of debt and keep on top of your finances.

Being stuck in debt is a vicious cycle that can spiral out of control. Indeed, it is often a slippery slope due to the interest and late fees that accrue on overdue payments… and once you start missing a few payments, your financial position (and credit history) can quickly go downhill. One of the best things you can do, on a practical level, is to consider consolidating your debt as this might be a good strategy to reduce your stress, rebuild your credit rating, and get out of debt in a sustainable way. For most people, having debt in itself, isn’t the thing that is stressful - it’s the debt collection activities that happen when people fall behind, and the constant worry about what could happen next -- it’s the phone calls, the threat of a ‘home visit’, the threat of court action, and even the prospect of bailiffs coming to remove personal items from your home. 

Being pursued for debt can be an extremely stressful situation, and often times when people are in a serious financial position they are pursued by multiple creditors with multiple streams of debt collection activity; which compounds and spirals to such an extent many choose to then bury their heads in the sand by not opening letters, avoiding phone calls, and detaching from the situation. However, when it comes to debt avoidance really isn’t the best strategy, it can provide temporary relief but it isn’t a long-term solution. The prospect of consolidating your debt into one larger loan in order to pay off the smaller fragments of debt offers immediate and permanent relief from multiple creditors banging at your door… it repairs your credit rating in the sense that you are no longer making several missed payments each month… and presuming you keep on top of the payments for the consolidation loan, it will actually start to rebuild your credit score!

Indeed, one the best ways to reduce your stress is to consolidate your existing debt into one of the many low interest loans available today, so there is one manageable monthly amount. There is of course, a challenge in terms of getting approved for a loan if you are already in a financial pickle and have missed payments in recent months - but there are a number of products available even if your credit history has been damaged.

In summary, the first step to financial freedom might not seem particularly glamorous but getting out of debt is akin to laying firm foundations on which you build a house, so this first step is vitally important to reaching your goal of financial freedom.

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