Did you know you are being deceived? Everywhere right now. On TV. In the newspaper. On the radio. In magazines. You keep getting the same message: “Buy now, pay later”; “Consolidate your debt into one simple monthly payment”; “Get Secure Line of Credit”. Or the perennial “Don’t worry, it’s a good guilt.”
The truth is, there is no such thing Well Fault. Debts are debts. It’s money you owe someone, money that will have to be repaid at some point in the future. “Good debt” is a misnomer. There is better Debt, sure, because there is too really bad Fault. But debt is never good. Not really.
We live in a debt society. We are constantly encouraged to buy things on credit. Why? Because it’s a profitable business for lenders. They don’t do it out of the goodness of their hearts. They’re in it to make money, and their goal is she.
Of course, it is difficult to live completely without debt. Buying a home almost always requires some form of mortgage these days, that’s true – few people can afford a home outright, especially early in their careers and families. But you don’t have to be in debt for the rest of your life. A mortgage is supposed to be a in the interim Debts covered by the (usually) stable value of the property you bought with it. It should be a reasonable, affordable amount that can be repaid within 10 to 20 years of purchase. And you should have a piece of equity in the house right from the start. But that’s not what people do anymore. You get a mortgage of 100% of the appraised value of the house. Worse, they get interest only Mortgages that leave the principal balance – the amount you borrowed – untouched. Is it no wonder these people end up drowning in debt?
But it goes beyond mortgages. A debt mentality pervades our society. For example, once you have equity in your home, banks urge you to “release” the money with home equity loans and secured lines of credit. Use the money to improve your life, they say, by renovating the house, taking that big vacation you’ve always wanted, or — here it comes — consolidating your other debts.
your other debts? Secure. You think the only debt people have is mortgage debt? No, they have many other debts. It’s a banker’s wet dream out there today… lines of credit. cash advances. overdraft coverage. Automatic credit card limit increase. Don’t pay anything now. If you’re not careful, you can build up a lot of debt very quickly.
And that’s the problem: At some point, these debts have to be repaid. If you run into too much debt, you’ll soon start worrying about the monthly payments. Your peace of mind will suffer and possibly other things like your marriage and your job. Is that the price you’re willing to pay to have things you couldn’t otherwise afford?
The solution is not debt relief or debt consolidation. It is debt avoidance. You should do everything in your power to avoid getting into debt. Because too much debt will tear you down physically and mentally.
What if you already have a lot of debt? There are things you can do. Yes, you can consider consolidating debt, but that only works if you can stop accumulating more debt once your current payments are reduced. Otherwise, you need to tackle your debt with a step-by-step plan that involves paying off the highest-interest debt as quickly as possible, and then using the money you free up from that debt to pay off the next higher debt to pay, and so on. It’s the snowball method of debt reduction, and it works.
The key to all of this is willpower. Commit today to be debt free as soon as possible. The peace of mind it gives you will be worth it in the end.