Zero debt is a situation that means financial freedom for an individual. Freedom from any type of external financing such as a loan, debt or debt consolidation; In other words, it simply means that the individual is free from any financial obligation to third parties.

People get loans from financial institutions and banks to meet their urgent financial needs. But at some point they stop paying the monthly sum due and thus become debtors. Their debt keeps mounting until they finally file for bankruptcy. This is a permanent black mark on their profile and wherever they go for any kind of help, it will rear its ugly head. Therefore, 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 index. Assets minus liabilities will show whether there is a surplus or deficit on your financial statement. If your assets are higher than your liabilities, then you are debt-free, meaning you have zero debt. But, when the latter is higher than the former, then the problem of debt and debt consolidation begins. So how do you maintain a zero balance? By following simple but effective steps, you can become ‘debt zero’.

* Controlled expenses: take note of the things you urgently need and control the desire to spend unnecessarily on things that you could do without. Divide your monthly income like this: need, need, investment and savings. What you need most is need; secondary needs (which you may or may not need very specifically) are needs. An investment is in stocks, bonds, or real estate. Savings is what you are going to use in your future.

Zero debt is all about money management. Check Credit Card Usage: To maintain a zero balance, always be careful about your credit card usage. Eliminate the temptation to slip it where you need it – this is what will land you in serious financial trouble later. Therefore, it is best to minimize credit card use to maintain zero debt.

* Debt consolidation: If you are in debt or trying to pay off a loan, always pay the monthly balance without fail or try to extend the payment period so that the monthly stress is less. Debt consolidation is another option that you can discuss with your financiers. Discuss a debt elimination plan with several companies and try to get the best possible debt consolidation for zero debt.

* Plan a monthly budget: planning a budget can lead you to have zero debt. Allocate how much you can spend on food, transportation, clothing, entertainment, etc., and stick to these limits. Following a more disciplined approach will serve as great milestones in keeping you debt free.

Zero debt has to do with planning and managing available resources. Making wise financial decisions can keep you out of debt. Enlist the help of debt consolidators or financial consultants to guide you on the right path that will give you zero debt and which means complete financial freedom from debt.