Living with debt has become a part of the American way of life. People take out loans to pay for cars, homes, education and an infinite number of other things. To add insult to injury many also own several credit cards. On average a general American household carries a debt of $ 9000 on them, and this number is increasing. The only means to get out of this debt, is through the paychecks earned from work. The average working US citizen makes a decent income, though it does not feel that way, as a large part of that income goes into payments for loans, mortgages and other payments to get out of debt.

The wealthy are free of this problem, as they have little to no personal debt at all. These people know the difference between the different types of debt, and keep their interest payments and fees to an absolute minimum. In order to accomplish this, debt has to be paid off as fast as possible.

This being said it is safe to say that the way to become financially free starts with debt control.

In order to start moving towards financial freedom the proper mindset is invaluable. Treat your debt management like a business. Just like with a real business the goal is to keep expenses at a minimum. With a real business the goal would also be to maximize profits, but since the income comes from a regular job, this is not an option unless you were to change jobs, get an additional job, or receive a promotion. Usually that is not an option, so let’s concentrate on the reduction of expenses for the time being.

Start managing your expenses by calculating them on a yearly basis. To illustrate this: a daily cup of coffee that costs $3, would be $1095 annually and there are many more similar examples one could make. Realizing the cost of the little things most obtain without thinking, is also realizing that it adds up fast. So the first change would be to stop buying that cup of coffee and instead make it yourself at home, reducing the costs per cup of coffee significantly. Do this with all things and you stand to save a lot of money annually.

Put the saved money to work for you, by putting it into a high-interest savings account, in order to receive extra interest income on your money. It will also serve as your emergency fund and be a temporary placeholder for your money, until there are sufficient funds to invest in bigger and better things. Put everything you save in there, from the smallest amount to the largest sum, and you will find that it builds up quickly.

Transfer credit card debt to cards with a 0% APR and take care to select cards that provide 0% APR for at least half a year. Also make sure to select a card that charges no balance transfer fees. After this, divide the debt over the 0% APR months equally. This will be the amount to pay off. This is debt you need to pay off in any event, so the faster it is gone the better it is in order to free your way to gaining financial freedom.

Do the same with all your debt: Loans, mortgages, they all need to be paid off as soon as possible in order to pay as little interest as possible.

Open a broker account with low commissions, in order to start investing the amount of money you have saved. REIT stocks and dividend re-investment plans are usually a good choice and will start increasing your profits. It is also a good idea to seek out securities which pay monthly dividends instead of quarterly.

In the mean time educate yourself on investing. Learn all you can, and then implement it wisely. Once you find the right ways for you to invest your money, you are well on your way to financial freedom. It is usually the first step that is the hardest since bringing yourself to do something takes some effort, but without any action you will not reap any benefits. So what are you waiting for? Start paying down your debt now.

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