My Debt Relief Plan

Financial Freedom Is Not Just About Being Debt Free

Financial freedom is a bit of a misnomer. Having financial freedom is defined as being in a place in your life where you no longer have to work to pay for your living expenses. To me, having financial freedom is more about time than money. What could be better than having the time to do what you want without having to work?

That said, many people seem to confuse being financially free with being debt free. Debt has very little to do with financial freedom. If your income is enough to cover it without you having to work, you are financially free. Even if you have $5,000 a month in credit card payments, if you have the money to pay them and you don’t have to work for it, you have financial freedom.

Of course, being debt free can be an integral step in achieving financial freedom since the less debt you have, the less your living expenses are from month to month and the less you income you will to achieve financial freedom. It is definitely recommended that you attempt to pay off all your debts. But paying it off is just one of the first steps in a journey towards financial freedom.

Saving money is also a big part of financial freedom. I recommend having a savings account that is for emergencies only and is easy accessible in case you need to withdraw money. Start with a small amount, maybe $500 or $1000, just in case your car breaks down or, like me, your stove decides to catch fire and explode one day. Don’t worry too much about the interest rate on this account since its purpose is not to make you money.

Next you should have a savings account that is hard to withdraw from, like an automatic deposit savings account that gets a predetermined amount from your paycheck every payday and is invested in a mutual fund or other low-risk investment. The annual gain can be pretty good with this type of investment and it is more difficult to withdraw money from them than your local bank savings account.

Once your savings accounts are set up, and you are focusing on paying as much debt off each month as possible, you need to begin thinking about increasing your income. This is the step that most people overlook in their quest for debt and financial freedom, but it is the most important.

In order to stop working and still earn enough money to pay your living expenses, you need to find a way to get income without working. The two main ways of doing this is through investments and through passive income. There’s also inheritance and winning the lottery, but I wouldn’t stake my financial future on either of those.

Investing is tricky when talking about getting enough of a return to live on. Real estate can be a good investment, especially with rental income, for producing cash flow but as with all forms of investments it is at the whim of the market. Plus, despite what all those ‘no money down real estate deals’ books tell you, you need good credit or a lot of money (or both) to seriously invest in real estate.

Creating a passive income is a more likely way to become financially free than investing, at least for the short term. Internet niche marketing is currently the easiest and most profitable way online to make a passive income without having to invest a whole lot of money. In fact, it is possible to make money through niche marketing without spending any money at all through sites like Squidoo and Hubpages but it is easier and more profitable to build individual niche sites with a targeted domain name.

Don’t be fooled though, although it is easy enough to learn, Internet marketing takes hard work and a lot of time invested into it. Building a website that will bring in targeted readers who are willing to spend their money is quite a task and building trust takes time. You will not get rich overnight but, if you put in the time and effort, you will be able to achieve financial freedom from niche marketing in the future.

For more information on achieving financial freedom, visit http://livingmybigdream.blogspot.com

Jennifer Carpenter is a work at home mother of three, two teens and a preschooler. She is a writer and Internet marketer who is currently working towards financial freedom through working online. Read more about her incredible journey at http://www.livingmybigdream.com

Add comment October 28th, 2007

How to Pay Off Your Payday Loan

Are you trapped in payday loan cycle? You get new payday loan to cover your existing loan and it keep repeating until you are overwhelming. If you are, you are not alone. Many people take out their first one hoping to pay off in full in the next payday, but end up with taking out more loans and scrambling to cover one after another until their debt reach to the overwhelming level and don’t know what to do. How to break this payday loan cycle and pay it off? Here are 5 practical ways to help you break the payday loan cycle:

1. Understand What You Are Up Against

Each state and each country have certain law against payday loan borrowers. For example, Oklahoma’s laws allow payday loan’s repeat borrowers who have taken out three consecutive loans to repay their loan balance in four equal installments. This is a good opportunity for you to break the cycle and pay off the loan.

You should also be able to find your local or state government representative that can provide help and advices on how to handle your overwhelming debt issue. You may discover more options to pay off your payday loan.

2. Pay the Loan(s) off ASAP

The fact is whatever you have borrowed, you need to pay it back; Let face it. Thinking of paying off your payday loan without any action won’t get your debt problem resolve. What you must do is finding a way to repay the loan in the next payday without getting a new payday loan and find some way to get through what will be a very difficult several weeks without the money.

Some ideas to cash out money to pay loans:

• Have a yard sale or garage sale. Put anything that can be sold such as furniture, clothes, gifts, watches, jewelry and etc.
• Sell a few things in your local newspaper’s free ads or sell them online at eBay.
• If you are under employment, you may discuss with your employer to get an advance salary and repay it over several pay periods.
• Borrow from your family or relatives to pay off your payday loan and repay them over several pay periods.
• Get a second job or part-time job to earn extra money to clear your debt.
• Cut down your monthly expenses and optional spending such as entertainment, clothing and vacation to save more money to pay into your debt.

3. Get Help From Credit Counseling Service

If your debt is too overwhelming and something in such a desperate situation, you can be out of mind in thinking a solution. Then, the best option should be getting help from finance professional such as credit counseling service.

Consumer Credit Counseling Services (CCCS) are non-profit counseling centers that can offer you with individual financial advices based on your financial situation. A consultant will be assigned to you to understand in details your current financial situation before proposing options and solutions to your financial issue. These options can be especially helpful to help you understand your options and what are the best solutions to your debt issue. In many case, you will be advised to enroll into their debt management plan so that you can follow their plan to work your way out of debt. However, it is optional but if you decide to enroll into any debt management plan, you must aware that there will be a small monthly fee involve.

Summary

Keeping yourself circular inside the payday loan cycle will drag you into overwhelming and stressful debt issue. The only solution is finding a way out of it by breaking the payday loan cycle. Beside, working out your own ways to pay off the loan as soon as possible, you can get help and guidance from professional such as consumer credit counseling service.

Cornie Herring is an finance author of http://www.debt-consolidation-1stop.info, an informative website that provides FREE information and guides on personal finance, debt management & bankruptcy alternatives. You can find useful information and resources to reduce and eliminate your debt issues at her website.

Add comment October 28th, 2007