Do you want to know how to become debt free? Are you one of the millions of Ameri-cans who have come to see the American consumer culture as being toxic to budgets and to lifestyles? Are you ready to live a life in balance with your finances? This article will show you how to become debt free.

How to become debt free begins with taking stock of your current assets and liabilities. You may be shocked to find out just how much you owe and just how little of value you own. With the recent declines in the housing and stock market, a good percent of Americans now owe significantly more than they own.

Once you’ve taken a personal finance inventory, the next step in how to become debt free is to make a budget. A budget often means making painful choices between what you want and what you need.

There are some things that are non-negotiable. Unless you are prepared to give up your home, making the mortgage payment is a necessity. If you want to become debt free, making payments on credit card debts, medical bills, and any other bills are man-datory.

Then there is the category of necessary, but with discretion. Any number of lifestyle choices fall into this category. For instance, it is necessary to eat. But, it is not neces-sary to eat out. It is also not necessary to buy expensive pre-packaged foods at the grocery store. By taking stock of the amount of money you need to spend to get healthy, well balanced but not extravagant meals, you can begin to live on a budget.

Another item that falls into this necessary, but with discretion category is utility bills. Us-ing fans instead of the air conditioning and space heaters instead of central heat, you can lower your utility bills dramatically. You don’t actually need 150 cable channels ñ the basic package (or no package at all) will do. While cell phones have become a ne-cessity for emergencies, it is not necessary to have the maximum plan with unlimited text messaging. Learn to do without.

Then there are the things that are not necessary. These things make life nice, but they are not essential to living. For instance, travel can be fun and life enhancing, but it is not necessary. One of the steps in how to become debt free is to take a hard look at the lifestyle choices you make and determine that you are going to cut out some of the luxu-ries for the time being.

If you want to know how to become debt free, there is a simple three step formula. First, pay for all of the things that are absolutely, positively necessary. Second, pay down your debt. Third, put aside some money for emergencies so that an unexpected expense won’t knock you back into debt. Only then should you start spending money on luxuries again.

And that’s how to become debt free.

Useful Resources : -

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