Michael O. – City Honors College Preparatory

How can People Become Debt Free

You would become shocked of the staggers that exist in consumers’ financial circumstances in the United States. Data shows that more than 70% of the consumers take to the grave with them not only themselves, but a debt that was never paid. The most common form of debt derives from credit card balances, in which exist mortgage debts, auto loans, personal loans, and student loans. The key to avoiding becoming part of the 70% is to start from a young age, creating a plan regarding how you will fulfill your payments and loans to have a greater future. A change in your life will rest in your mind as a personal appeal to the financial decisions you do in the future, when you seek and intercept debts before it is too late.

Try to pay everything you purchase with cash and avoid the use of credit cards. Having a credit card causes encouragement in you to buy more than what you intended to when you enter a store. All stores have the intentions of influencing desire and temptation in you to buy more of their products by creating an appealing and attractive display. Apart from this, the total price you pay for products may rise from 12% to 18%. Carrying just the correct amount of cash or a small extra portion just above that amount for what you are going to purchase is better to avoid extra costs that you would do with a credit card, limiting impulsive spending.

Thus you should use cash more often and avoid carrying the plastic card. Do not ever waste your money on things that you do not really need in your life. Sometimes you have to ask yourself, do I really need this? Is this something I do not have? Is there a substitute for this that is more affordable? Money is meant to be spent but you must utilize it in a wise way. You do not want to overpay for products if there are others that can provide the same utility to you for a lower price.

As well, you do not want to pay for things that you already have and are unnecessary.

Tracking and organizing where your money goes to is essential for maintaining a debt free life. Creating a plan for your weekly and monthly spendings will lead you in the right direction since you will clearly see how much are your costs in comparison to the money you have and make. You can use budgeting apps to create this plan and figure out how much you can spend and how much you wish to save. Records of all your expenses will allow you to easily have a clear view of the conditions you are in. Staying on time with your payments will save you from higher interest rates and help you maintain good credit. Not doing so will only backfire the progress of you dealing with your payments, and also cause an effect in future payments or loans by being placed at higher interest rates. Act before time consumes you into desperation and plan with wisdom.