Most people are carrying some sort of debt We live in a society in which borrowing is the norm and repayments leave us high and dry before the month is over, forcing us to borrow yet even more at even higher interest rates from the creditors out there.
So, the burning question remains, is it truly possible to live without debt?
Some people believe so and are happy to share their insights in the hope that some of the advice might stick and people might achieve and maintain a debt-free lifestyle.
With that said, all debt isn’t bad.
Good Debt vs. Bad Debt
Most financial experts will tell you there is ‘good debt’ and ‘bad debt’. Good debt would be considered essentials, such as one’s home that you more often than not end up having to pay off to the bank in the form of a mortgage.
So, in this case they would say that this ‘good debt’ helps you because paying on time and regularly earns you a high credit score, which may help drop interest rates on your home or vehicle if you are paying to the same institution each month. Other examples of god debt are loans you take to start a business, or to generate income in some other manner.
This, however, is not the case with credit card debt. Freedom Financial Network’s Brad Stroh, tells consumers that and payday loans are always to be considered ‘bad debt’. This is because interest rates are really high and both types of obligations can trap you in an ongoing cycle each month.
Five Habits of Debt-Free People
By and large, those who have figured out how to live without debt in their lives have a few traits in common. The Balance enumerates those as follows:
- People who live without debt set clear money goals. They plan how to pay off debt and make efforts not to spend money on unnecessary things.
- Marketing tactics that may tell them they need this or that item does not easily convince them. They proverbially turn over each and every penny as they seek the most cost-effective solution or make purchases that are true value for money.
- Being disciplined is possibly one of the hardest traits that a debt-free person has to foster, but it is essential in achieving your goal to cancel out debts.
- People striving to be debt-free take on a non-materialistic mindset. That is, making an effort not to buy stuff such as the latest kitchen gadget or the latest mobile phone holder because it is ‘pretty’ or ‘cool’ to have, etc.
- Debt-free people also act responsibly, focusing on actual needs rather than wants.
- They pay credit accounts off in full each month. This heads off interest charges before they can accrue.
It Can Be Done
Before you think this is just a pipe dream, success stories such as this one are real: “Millionaire by 35 – man saves seventy percent of income and retires young by simply following basic money rules”.
The good news is it absolutely can be done.
Following these simple rules will certainly create a foundation for anyone who truly tries to live debt-free in a world where it is so easy to start a line of credit. The main thing you need is the discipline to shun desiring luxuries and things we don’t really need. It’s all about being smart with your cash and not falling for the okie-doke.