First Bank of the Lake: 5 Tips To Achieve A Debt-Free Lifestyle

Do you feel buried under a mountain of debt? While some types of debt can be beneficial for building up a strong credit rating, too much debt can become overwhelming very quickly. Don't resign yourself to a life filled with debt - First Bank of the Lake is here to help you get on top of things with these tried-and-true tips for achieving a debt-free lifestyle.

1. Be Honest About Your Credit Card Habits
Many debt relief experts encourage people to use cash exclusively in order to avoid racking up credit card debt. However, credit cards aren't necessarily a bad thing; it just depends on how you use them. If you pay off your balance in full every month (or pay off individual transactions immediately), you can enjoy the convenience credit cards offer without building any unnecessary debt. If you do not trust yourself to manage your cards in this manner, however, you may be better off sticking with cash.

2. Apply For Scholarships
Many recent graduates are struggling to catch their breath under the weight of their student loans. According to Time.com, more than two-thirds of this year's college graduates have approximately $35,000 in student loan debt. Shouldering this type of debt can make it challenging for them to make important investments, such as buying a car or providing the down payment for a home. Before taking out student loans to cover your college education, research your scholarship options in depth. Even if you do not qualify for many scholarships from your school directly, you may be able to find some funded by independent third parties.

3. Focus On One Debt At A Time
Department store debt, credit card debt, student loan debt, car loans, mortgage loans... many people in our society are facing multiple types of debt at once, and getting out from underneath them can seem like a daunting prospect. By focusing on paying off one at a time, you can make the process more manageable. Some people choose to focus on the debt with the highest interest rate first, whereas others like to begin with the one with the smallest principal. Choose the strategy that most appeals to you, and stick with it. Put extra money towards the principal on your chosen debt, and only make required payments on your others. Once you have the first one paid off, take the money that was going towards it and add to the payments on your next chosen debt. By tackling them in this fashion, you can slowly but steadily make progress.

4. Avoid Temptation
What are your spending weaknesses? If you know you're prone to extravagant shopping sprees, unsubscribe from any mailings that advertise coupons or other special offers so you won't have to face the temptation appearing in your mail/inbox. If you know that you like to treat yourself to lunch at various restaurants on your lunch break, make it a point to bring food to the office so you don't have to leave. There really is no right or wrong way to approach this strategy; the important thing is to know your own spending habits and make adjustments accordingly so that you won't have to face unnecessary temptation.

5. Build A Large Savings
If you are struggling to get your feet underneath you, this particular tip may seem less than helpful. However, a solid savings account is your best defense against a debt-filled lifestyle. By having a strong emergency savings account, you are more likely to be able to cover the unexpected expenses that life may throw at you without going into additional debt. You can build your savings account by setting aside 20% of every paycheck. It may mean having fewer dinners out or fewer bottles of wine from the grocery store, but it's a small price to pay for financial security.

Set Up Your Savings Account At First Bank of the Lake!
As you begin to build your savings so you can work towards a debt-free lifestyle, you may want to consider establishing a separate savings account. Keeping your savings in a separate account allows your savings to be more "out of sight, out of mind," which can make it easier to resist the temptation to use your savings for non-emergencies. If you are looking for a place to set up a savings account at the Lake of the Ozarks, consider First Bank of the Lake. Our banking professionals would be more than happy to help you!

First Bank of the Lake - Striving For Excellence

Member FDIC. Equal Housing Lender.