Investing in Philippines: Ways To Be Debt Free: Pay Your Bills....


Sunday, February 19, 2012

Ways To Be Debt Free: Pay Your Bills....

.....even if you have fully paid them.

That is what I was about to say.

The concept of pay yourself first has been one of the best ways to instill in us the discipline of saving. You have to pay your retirement first before paying up your bills. But would that be a problem because if you don't pay your bills surely your creditors will bug you endlessly. So how should you deal with this matter?

First decide how much will you save. Having that figured will be your starting point in your saving plan. Set that amount aside first every time you get your salary or earnings. Then set aside money for your daily expenses. These daily expenses should exclude any loans or payables you are paying up. It should include your daily fare going to work and your meals to work. Oh exclude all things that are purely "wants" like your coffee after work or your additional chocolate mocha cake in your lunch.

What remains is for your bills. Yes it would be pretty small by that time but you have to work that out with your creditors. 

Now after paying month to month I guess you will soon reach your dream day; that is your financial freedom day. 

When this comes do two things:

  • Don't ever borrow again unless it is a matter of life and death.  If you really can't avoid it make sure you get the best terms when borrowing.
  • Continue setting aside that money for your bills except that this time it goes straight to your savings.

With that it means you will still be spending in your old budget, no purchases for your wants unless you have set aside a savings fund for it, and you will have new lifestyle. Keep the saving lifestyle that you have. 

With the savings that you have from continually setting aside the same amount of money that you use to set aside for bills I bet you can now put it in an investment vehicle that will now enable you to enjoy the things you forgone before like a high interest online savings account or the stock market. Let your savings earn passively, meaning the same amount of money don't decrease because it generates income on itself without you really exerting much effort because it earns from the investment vehicle you have chosen.


So again pay your bills even if you have already paid them, only this time put that amount in your savings.

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