It’s easy to get swept up by the glamour of debt, specifically of credit cards. Why not, if you can shop all you want and not worry about paying until the end of the month? And you can pay only the minimum amount!
But letting ourselves get swept up too much can become harmful. Not only will it cost us our once favorable credit score, but possibly our entire finances. Many people get bankrupt from the mountain of debts they owe. Competent debt relief lawyers in Salt Lake City and other places can help people start all over again. But while you’re still safe, take note of these ways to live debt-free in the future:
Avoiding Debt
People have different reasons for acquiring debt. Some do it because they aim to live a particular lifestyle they can’t truly afford. In that case, you’re just overspending, which is in no way justifiable.
Below are ways to dodge debt when the temptation arises:
- Spend within your means. As mentioned, you cannot justify overspending. Although there can be instances in your life where you’d have to spend more than what you earn, this shouldn’t be a frequent or consistent occurrence.
- Pay more attention to the total amount you owe. People who pay only the minimum amount of their credit card bills, for example, can feel like they’re reducing their monthly outlays when in reality, they’re losing more because they pay more interest. Make it a habit to check how much you truly owe, and repay it in full if you can.
- Acquire loans only when necessary. While it’s an excellent practice to dodge debt, it’s also unrealistic to assume that we can stay debt-free throughout our lives. When a time comes that your only option is to borrow, loan only an amount that you’re comfortable repaying.
- Control spending. Distinguish between needs and wants to avoid excessively buying unnecessary things. Budgeting will also help in determining what we can genuinely afford to buy.
- Apply for credit cards that suit your lifestyle. For example, if groceries account for your largest regular outlays, then getting a credit card with rebates for every day spend can benefit you. If you’re a frequent traveler, then a credit card with high earn rates for flyer miles would best suit you.
- Plan. Invest in an insurance policy to avoid borrowing during an emergency.
- Pay bills on time. An excellent way to keep your debts from accumulating is by always paying your bills on time. It will also improve your credit score, meaning you’d be deemed a trustworthy borrower by lenders. Also, avoid going over the limit of your credit cards to maintain your favorable credit score. If you experience difficulties in repaying debt, inform your bank immediately so the can help you come up with a feasible repayment plan.
Benefits of Being Debt-free
If you’re still not convinced that a debt-free life is healthier for you, take a look at these irresistible benefits:
- You’re more financially secure. With all your debts repaid, the rest of your income can now go directly to your savings or retirement.
- You get to spend money without guilt. Without debts pulling you back, you’re now confident that you’re buying things you can genuinely afford.
- Your bills are reduced. The days of dreading monthly credit card bills are now over. You only need to budget for the necessities, like utilities and phone bills.
- Your assets are yours. Your home, car, business, and other belongings are now entirely owned by you, not by your lenders who can take them away from you if you fail to repay them.
- You’re no longer at the mercy of lenders. You can now enjoy complete control of your assets and finances.
- Higher future earnings. With all your income straight to your savings, you can be assured of a financially-stable and secure future.
Don’t abuse your good credit history by acquiring more debt. The tables can quickly turn with just one missed payment, so manage your expenditures wisely!
