How to Retire Debt Free

Life is not about earning smart, but it is more about saving smart. There is no doubt that if you have the option of increasing your source of income to supplement the money flow into your household, you can save more. However, if there are no means to increase your salary structure how you can make sure that you save more and retire debt free. In this article I will look at both the options.

Firstly let’s consider how you can increase your income. Well believe it or not, but there are several ways of doing that! The most obvious way of doing that is that you could ask for a raise. Remember. If you don’t ask you don’t get. But you should be able to justify that raise. Either you could update or upgrade your skill set or you could take on additional responsibility. You can expect to get a 5-10% raise in this scenario. However, if this does not work out, you could look for a new job opportunities or start a side business. While you have your present job, you can start some small side business which does not involve a big time or effort commitment. There are many things you can do online, which do not involve huge investments. You can also become a part of a direct selling company in which you not only benefit from your efforts but the efforts of your whole team. Many smart people capitalize on their hobby. For example if you are a great photographer, you can hold an exhibition of your own or sell your prints to a media company.

After you have looked at ways of increasing your income, you should learn to live frugally. This might entail making lifestyle changes. You will also be required to make a budget and to stick with it. You should differentiate between wants and needs. It is easy to succumb to the temptation of buying that new shoe or that new dress you have been eyeing for some time, but prudence says that you first carefully consider if you really need that. Write everything that you spend. This will help you keep a track of any financial changes that might happen over a period of time. It will also help you look at the discretionary expenditure which you may decide to cut down on in the next monthly budget. Another thing you need to have is LIC life insurance policy which may have high claim settlement ratio

Have an emergency fund. Most finance gurus emphasise on the importance of an emergency fund. The purpose of such a fund is to prevent you from any sudden drop in savings due to an unforeseen situation. If there is an emergency, you will be armed with a fund that you have kept aside and thus not eat into your other planned savings.

Get rid of any existing debt. Most people accumulate various types of debts including student loans, mortgages, credit card debts etc. They don’t realise that not only are you going to re-pay the principal amount but also huge amounts of interest. Therefore you must prioritise your debt and re-pay it off. Usually it is suggested that you pay off the debt on which you are paying the maximum amount of interest first. But that is usually the biggest amount and the most difficult to pay off. So you could also pay off the smallest debt first to give you a sense of accomplishment.

Invest smart. Once you have taken care of your debts, now you reach the crucial stage of investing smart to maximise returns on your savings. It is important to consider the trade off between risk and returns. You should be able to balance your portfolio to achieve this. To do this the assistance of a professional can go a long way. It might be a small cost you might have to incur, but it would have far reaching consequences.

When you retire debt free, your retirement income goes up thus ensuring that you may be able to enjoy a more comfortable retired life free from worries.

Author bio : This aticle is written by Mayank Gupta who owns a website LIC Life Insurance which is an another product which you can add in your portfolio to retire debt free.

Vijayraj Reddy
Vijayraj Reddy is founder & editor-in-chief of, a financial blog which helps people to earn money, invest money and save money. You can find him on Facebook & Twitter or send him email at [email protected]

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