The recession has hit millions and people are scouting for ways in which they can live a debt free lifestyle. Many are wondering how to repay debt they have managed to put themselves into. Improper management of finances is the main reason of people getting into debt. The first step to remain debt free is in learning to live within your finances. You have to be financially secure and strive to keep yourself out of debt. You may laugh and say that’s not possible looking at the rising prices of commodities. But there are ways and means which if you practice religiously will ensure that you enjoy a debt free lifestyle. Read this how to live debt free blog and stay out of debt forever.

The first and most important step is chalking out a monthly budget which is realistic and sticking to it. You have to spend money only on the essential things that you need in life. You can only spend on other things if you have excess money. Cut down on unnecessary expenses like dining in restaurants, talking a lot on the cell phone, buying items which are not necessary for daily survival. This is the best debt elimination plan.

Repay debt incurred on your credit card. Pay off the amount of the credit card which has the highest rate of interest. Also pay off the amount which has exceeded 50 percent on your credit limit. Then start paying off the next amount which has the next highest rate of interest and continue further till you clear the balance on the lowest rate of interest. The best way to live a debt free lifestyle is by opening not more than four credit accounts which will also help you to have a good credit history.

Another way which helps in staying out of debt is by using cash to pay bills. Use credit cards only when absolutely necessary, for example, making a hospital bill payment. Take the option of direct deposit of your pay checks. You will thus get your salary without going to the bank. When you don’t go to the bank, you will not feel the need to withdraw cash. Ultimately, you will end up spending less and saving more.

A good debt elimination plan is to manage your housing expenses. Calculate your total income and approximately one third of that should be your housing expenses. Cut down on your energy expenditure by doing simple things like switching off the lights and fans in a room you are not using. If you are paying mortgage, then see if you can find one where the rate of interest is low.

If you are looking for debt settlement information on a debt consolidating firm, then a good place to search is the Internet. But take care that the debt consolidating firm is making you pay a lower rate of interest than before. Otherwise you may end up paying more than you bargained for.

Planning always helps. So make sure you decide beforehand how much of your income you are going to spend and stick to it.