Many people, even millionaires and billionaires are in debt. However, they are obviously in different conditions. It is common to see people who struggle with their debts and they can only live from paycheck to paycheck. When we have debt problem, the simplest method is to find ways to increase our revenue. However, this may not be the easiest thing to do because many people are already weary with their current jobs. They are dreaming that they don’t have to be worry about money and they can be free financially. However, transitioning from debt problems to a complete financial independence isn’t a small leap. This requires self discipline and concrete planning. It is more than obvious that we need to get out of our deep chasm of debt before our finances can soar. This should be the most important goal for now. It should be quite easy to embark on our journey to our financial freedom if we are finally able to be out of debt.

There’s no fancy or innovative way to get out of debt. As always, we need to be consistent, by focusing to pay off debts with the highest interest rate. If debts seem to be unbearable, we should look for ways to consolidate them into one single debt with more reasonable interest rate. Eventually, if we are properly disciplined, we should be able to get out of debt. After we have eliminated our debts, we should sustain our positive money habit. Although we have more money to spare, we should reconsider whether it is necessary to buy those $250 shoes online with our credit card when we could buy cheaper ones at local thrift stores. We should be able to buy things at lower prices locally, instead of looking for items online. They more money we save each day, would mean the more money we can accumulate to reach our financial independence. Some people were so deep in debt that they actually find it uncomfortable to live without one.

There’s no real advantage of accumulating debts if we don’t need them. In fact, we should really consider to cut up credit cards with higher interest rate and to choose only the one with the lowest rates. One credit card should still be useful during the emergency and using will be more manageable. In addition, credit cards are not like mortgage and car loans, they are notorious for very high interest rates. Even with only one credit card, there are times when we feel that we are drowning in it. That’s the reason why we should have only one credit card.

After we have eliminated debts, it should be time to create passive income. It is like a money machine that consistently produces money for us. However, creating one could require a longer process and we need to invest enough money. The most powerful way is to create a business that we can eventually delegate to a paid manager. Again, building such a business will take time and effort; but we should be able to do it.