Three Proven Steps to Become Debt Free and Stay in Control

With the whirlwind of economic woes affecting many people these days, becoming debt free is now the main focus on many people's mind. People are starting to understand if they want live debt free they must prepare, plan, and take action to get there.

Below I have provided three proven steps to become debt free and stay in control of your finances.

Step 1: Keep An Emergency Fund

We are living in volatile times, so keeping an emergency fund is a must. Don't even think about creating a debt free lifestyle without including an emergency fund in your financial portfolio. You should strive for at least 4-6 months worth of expenses in an emergency fund. A few years ago, many people didn't thing twice about establishing an emergency fund. The reason for that was home owners were able to tap into their home equity if an emergency arises. But now mortgage lenders are more hesitant to give home owners lines of credit due to the current state of housing prices.

So you must start now in building your emergency fund, even if it means sacrificing your retirement fund contributions for a short period of time.

Step 2: Lower Credit Card Rates Now

If your have a high credit score, stop hesitating and call the credit card companies and ask for a better deal. You maybe able to take advantage of a 0% balance transfer offer to pull your current debt to another credit card company. However, if you go this route, make sure you pay off the balance in full before the promotional rate expires. In past offers, teaser and promotional rates are usually for six to twelve months.

Step 3: Prepare For A Worst Case Scenario

When your coming up with a plan to become debt free, you have to realize that you have to live with less than you currently make. The reason for this is because you never know when you might be laid off from you job, or end with an unexpected expense. However, when you prepare for that rainy day when those unforeseen circumstance occur, you will be ready!