Zero debt is a situation that means financial freedom for an individual˳ Freedom from any kind of outside financing like a loan, debt, or debt consolidation; in other words it just means that the individual is free from any financial obligations to third parties˳
People obtain loans from financial institutions and banks to meet their urgent financial needs˳ But at some point they fail to pay the monthly sum due and hence, become debtors˳ Their debt keeps on increasing until they finally file for bankruptcy˳ This is a permanent black mark on their profile and wherever they might go for any form of help, it will rear its ugly head˳ So getting zero debt is a major issue for those who are into debt and debt consolidation˳
So what determines zero debt? It is determined by the credit ratio˳ Assets minus liabilities will show if there is a surplus or deficit in your financial status˳ If your assets are higher than the liabilities, then you’re debt free – ie, you have zero debt˳ But, when the latter is higher than the former, then the problem of debt and debt consolidation starts˳ So, how to maintain a zero balance? By following simple but effective steps you can become be ‘zero debt’˳
* Controlled spending: make a note of the things you urgently need and control the urge to spend unnecessarily on things that you might go without˳ Divide your monthly income thus: necessity, needs, investment, and savings˳ What you need most is necessity; secondary needs (which you may or may not need very specifically) are needs˳ An investment is in shares, bonds or real estate˳ Savings is what you will make use of in your future˳
Zero debt is all about money management˳ Check the usage of credit cards: to maintain a zero balance always be cautious about your credit card usage˳ Eliminate the urge to swipe it wherever you need to: this is what will land you in deep financial trouble later˳ So it is best to minimize the credit card usage to maintain zero debt˳
* Debt consolidation: If you are in debt or trying to repay a loan, always pay the monthly balance without fail or try to extend the repayment period so that the monthly stress will become less˳ Debt consolidation is another option which you can discuss with your financiers˳ Discuss a debt elimination plan with various companies and try to get the best debt consolidation possible for zero debt˳
* Plan a monthly budget: planning a budget can lead to your having zero debt˳ Allocate how much you can spend on food, transport, clothing, entertainment, etc, and stick to these limits˳ Following a more disciplined approach will serve as great milestones to keep you debt free˳
Zero debt is all about planning and managing the resources available˳ Making wise financial decisions can make keep you in zero debt˳ Get the help of debt consolidators or financial consultants to guide you to the right track which will give you zero debt and which means complete financial freedom from debt˳
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