Live Free By Living Free Of Debt
Are you sleeping as well as you should? If you have a lot of debt, probably not. If you owe a lot of money, it's probably keeping you up at night worrying about how to repay it all. Wouldn't it be great to be debt-free?
How to live free of debt is not a topic that most banks will discuss with you. After all, their bread and butter derives from the interest they make from loans and credit cards. If no one borrowed money from them, their business model wouldn't work at all -- they need consumer debt to make money.
But few people worry about debt these days. There's no cultural impediment to getting a loan anymore. People happily and laughingly discuss their credit card balances with friends and family. It's all viewed as normal. But not so long ago it wasn't normal. Loans were available, yes, but only if you had a hard asset -- a car or a house -- to use as collateral. But debt use is much more casual these days. How many people send themselves on vacation now using borrowed money?
Banks make it easy to acquire debt, of course. They send out low-rate credit card offers all the time. They offer to extend you a line of credit for the equity you've built up in your home, nevermind that you haven't even paid off the mortgage yet. Finance companies do it, too, offering no-interest or reduced-interest payment plans for buying cars, furniture, vacations, etc.
Just because everyone's doing it, however, doesn't mean that you have to wallow in debt. There are many advantages to debt-free living, but perhaps the biggest advantage is the peace of mind it brings you. If you're living within your means and you don't have huge debt payments to make every month, you're almost guaranteed to be living a healthier and happier life. Your family will certainly notice a change -- you won't be a grouch all the time -- and so will your friends. You'll sleep better and you'll feel better.
It's not easy to switch to a debt-free lifestyle, but it can be done. You start by not incurring more debt -- live within your means by paying with cash and not buying things you can't afford. Then you eliminate your existing debt by freeing up some money and aggressively paying down you debt using the "debt snowball" method.
Once you're debt-free, stay out of debt for the rest of your life. The only exception is your house, since it's nearly impossible to buy a house these days without a mortgage. But do everything you can to pay off the house in a short a time as possible.
Debt-free living used to be the norm, but not anymore. Very few people realize how liberating it can be, however. Do your best to rediscover this lost art!