Did you know that you’re being deceived? Right 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 debt into one easy monthly payment”; “get a obtain line of credit”. Or the perennial favorite, “don’t worry, it’s good debt”.
The truth is, there is no such thing as good debt. Debt is debt. It’s money you owe someone, money that needs to be paid back at some point in the future. “Good debt” is a misnomer. There’s great debt, sure, because there’s also of course bad debt. But debt is never good. Not really.
Debit Card
We live in a debt-ridden society. We’re encouraged to buy things on prestige all the time. Why? Because it’s a profitable firm for lenders. They’re not doing it out of the goodness of their hearts. They’re in it to make money, and their target is you.
Of course, it’s hard to live entirely without debt. To buy a home these days you approximately always need some kind of mortgage, this is true — few citizen can afford a house outright, especially at the beginning of their careers and families. But you don’t have to be in debt for the rest of your life. A mortgage is meant to be a temporary debt, one backed by the (normally) carport value of the property you purchased with it. It should be for a reasonable, affordable number that can be paid back within 10 to 20 years of the purchase. And you should have some of your own equity in the house right from the start. But that’s not what citizen do anymore. They get mortgages for 100% of the appraised value of the house. Worse yet, they get interest-only mortgages that leave the needful — the number you borrowed — untouched. Is it no wonder that these citizen finally find themselves drowning in debt?
But it goes beyond mortgages. A debt mentality pervades our society. Once you have equity in your home, for example, the banks urge you to “free up” the money with home equity loans and secured prestige lines. Use the money to great 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 debt? Sure. You think the only debt citizen have is mortgage debt? No, they have abundance of other debt. It’s a banker’s wet dream out there today… prestige lines. Cash advances. Overdraft coverage. automated prestige card limit increases. Pay nothing now. If you’re not careful, you can build up a lot of debt very quickly.
And that’s the problem: those debts have to be repaid sometime. Rack up 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. Is that the kind of price you’re willing to pay in order to have things you couldn’t otherwise afford?
The solution isn’t debt relief or debt consolidation. It’s debt avoidance. You should do all things in your power to avoid 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 the debt, but that will only work if you’re able to stop accumulating more debt once your current payments are lowered. Otherwise, you need to strike your debt using a step-by-step plan that involves paying off the highest-interest debt as speedily as possible, then using the money you free from that debt cost to pay the next-highest debt, and so on. It’s the snowball debt allowance method, and it works.
The key to all of this is willpower. Make the commitment today to be debt free as soon as possible. The peace of mind it gives you will make it all worthwhile in the end.
No Debt Is Good: Aiming For A Debt-Free Life