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Do you know that you are being cheated? Now, everywhere. on TV. in the newspaper. On the radio. in magazines. You’re getting the same message over and over again: “Buy now, pay later”; “Consolidate your loans into one easy monthly payment”; “Get a Secured Line of Credit”. Or the perennial favorite, “Don’t worry, it’s good debt”.
the truth is that there is no such thing Good loan. Debt is debt. This is money that you owe someone, money that needs to be paid back at some point in the future. “Good debt” is a misnomer. there is better debt, of course, because there’s also really bad loan. But debt is never good. Not necessary.
We live in a society steeped in debt. We are encouraged to buy things on credit all the time. Why? Because it is a profitable business for the lenders. They are not doing it out of the goodness of their heart. They’re in it to make money, and that’s their goal. You,
Of course, it’s hard to live completely without debt. You almost always need some sort of mortgage to buy a home these days, it’s true — few people can afford a home outright, especially at the start of their careers and families. But you don’t have to be in debt for the rest of your life. a mortgage has to be a Temporary The loan, backed by the (usually) stable value of the property you’re buying. It should be for a reasonable, affordable amount that can be paid back within 10 to 20 years of purchase. And you should have some equity in the home from the start. But now people don’t do that. They get a mortgage for 100% of the appraised value of the home. worse, they get interest only Mortgages that leave the principal – the amount you borrowed – untouched. Is it any wonder that these people eventually find themselves deep in debt?
But it goes beyond mortgages. A debt mentality is pervasive in our society. Once you have equity in your home, for example, banks urge you to “free up” the money with home equity loans and secured credit lines. 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 debt.
Your other loan? Sure. You think people only have mortgage debt? No, he has many other debts. It’s a banker’s wet dream today… Credit Lines. Cash Advance. overdraft coverage. Automatic credit card limit increases. Don’t pay anything now. If you’re not careful, you can accumulate a lot of debt very quickly.
And that’s the problem: Those loans have to be repaid sometime. Accumulate too much debt and soon you’ll be worrying about the monthly payments. Your peace of mind will suffer, and possibly other things like your marriage and your job. Are you willing to pay such a price so that you can get things that you cannot afford otherwise?
The solution is not debt relief or debt consolidation. Its debt avoidance, You should do everything in your power to avoid debt. Because too much debt will wear you down physically and mentally.
What if you already have a lot of debt? There are some things you can do. Yes, you can consider debt consolidation, but it will only work if you can stop accumulating more debt after reducing your current payments. Otherwise, you need to attack your debt using a step-by-step plan that involves paying off the highest interest debt as quickly as possible, then using the money freed up from that debt payment to pay down the next highest debt. do for, and so on. This is the snowball way of reducing debt, and it works.
The key to all this is willpower. Take a pledge today to become debt free as soon as possible. The peace of mind it gives you will make it worthwhile in the end.
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