One thing I despise is debt. It gets in the way of all my plans to pursue financial independence. Debt means you owe someone something and in this case, I’m referring to money. You owe money because you borrowed money whether it’s a car loan, student loan, mortgage loan, second mortgage loan, credit card balances, 401K borrowing, or any other financial obligation you may have. Before thinking about financial independence you have to become or get very close to a financially debt free state. It sounds like a fairy tale…it really does but it’s not impossible. If you’re in a position where you can pay all your bills on time, the full balance, and still maintain your lifestyle, then you’ve made it. If you are struggling month to month or even week to week, you need to take a closer look at the income you are bringing in and the expenses going out. If the expenses are higher than your income, take a closer look at where your money is being spent. Chop away debt.

Track Your Spending

Identify everything that you spend on. I mean every penny. Keep all your receipts; keep a log. This will help identify your spending trend and patterns. This can be a hassle but try to get into the habit because it will help you realize where you’re money is going. See if Mint can help.

Reduce or Eliminate

Out of the expenses you have, identify those that can be reduced or eliminated. If you can’t eliminate, try reducing it.

• I called my credit card company to cancel my account because I didn’t want to pay for the annual membership fee. They asked if the annual fee was waived, would I continue using it. I said yes and I kept my credit card without having to pay my annual membership.
• I called my home and car insurance asking them what are ways to get my bill down. They worked with me to identify all promotions and discounts such as being a loyal customer and having a good driving record. There could be discounts that apply to you.
• I call my cable company occasionally and ask them if there is a way to reduce my bill. Promotions change often and you won’t know what they are until you contact them.
• The point here is that it Never Hurts To Ask and vendors will want to work with you to keep you as a customer.

Stop Spending On Things You Can Live Without.

• Try cutting cable TV. I cut cable and only have internet service. I use an HD antenna and there are more channels than I expected! Test out how many channels you pick up with an antenna before considering cutting your cable TV service. Keep in mind that major stations such as NBC, ABC, and CBS have their own apps which allow you to stream limited shows and episodes at no cost.
• If you need a little more TV excitement, try enrolling in Netflix (referral link), Hulu, Disney+, or other streaming services that are typically less expensive than cable TV service but keep in mind the more subscriptions you have, the more it adds up.
• Limit yourself going out to lunch because the cost adds up.
• Brew your own coffee instead of buying it.

Get Rewarded

• Get rewarded for things you buy such as groceries and gas. Try using the Checkout51 app (referral link) and Ibotta (referral link) to get rewardsed for your spending. I use both of these apps and with Ibotta this is what I’ve earned so far.

• Refer people to companies you are a customer of. You might get an incentive for referring someone to your cable company, wireless phone company, your gym, your credit card bank, and so on. Always ask about referral incentives.

Price Adjustments

• Prices fluctuate all the time and it doesn’t hurt to go back and review your shopping history. If you see a price drop after you make a purchase, contact the vendor to see if you can get a price adjustment. I booked a flight with Southwest. A couple of weeks later, I checked the same flight and the price went down. I called them and got a price adjustment
• There’s a browser extension called Honey (referral link) you can install on your computer and it will monitor your purchases automatically. If it finds a better price, it will get you money back.
   

Identify what is causing your debt and find ways chop it down. Whether it’s through reducing or eliminating expenses or finding other ways to save, reducing your debt is one step to reach financial independence. If you are interested in following my journey, email subscribe to get alerts of latest posts or follow me on Facebook.