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Manage your debt and live debt free
Most Americans are up to their necks in debt. It doesn’t have to be that way; it is possible to live a debt-free life. It requires some discipline and you may have to make do without some things you have come to regard as essential. Nevertheless, it’s worth the effort to avoid being a slave to your creditors.
Read on.
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Debt free living is possible
The typical American family has nineteen different credit and debit cards and nearly $10,000 in credit card debt. With minimum credit card payments now at 4% of the outstanding balance, that’s a $400 check that has to go out each and every month to pay for stuff you already have, meals you have already eaten and vacations you have already enjoyed. It’s payment for which you don’t receive anything tangible after you pay. Even worse, a large component of that payment goes to interest, for which you receive nothing. If you pay late, the interest rate goes up and late payment fees are attached, making a bad situation worse. It doesn’t have to be that way; you can live a debt-free life. All you have to do is decide to do it and take the necessary steps. It isn’t easy, but the effort is worth it.
Here are a few things you can do to help yourself live a debt-free life:
- Get rid of the debt you have - That means that you have to start paying more to reduce your debt than you are spending. It means paying your bills on time every month and paying as much as you can afford. The minimum won’t do it. You can cut your costs by consolidating debt; move several credit card balances from high interest cards to one with low interest rates. Stop using your credit cards.
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- Create a budget - Add up all the money that comes in and all the money that goes out. Write down every single dollar you spend in a month and see where the money is going. Start to cut expenses that you don’t need. You’d be surprised to see where the money goes; HBO, Starbucks and lottery tickets can take up more of your income than you realize. Cut out as much as you can, even if it means taking a brown bag to work for lunch. Don’t forget to put some money in your retirement account. A 401(K) account counts as an expense.
- Spend diligently - If you can’t pay in cash, you can’t afford it. Stop using credit, especially for the nickel and dime stuff that adds up quickly. Fast food meals, movie tickets and gasoline purchases are not things you want to carry over from one credit card bill to the next. Pay cash.
It’s not impossible to live debt free, but it does take discipline. You’ve got to learn to spend money in a different way than you are accustomed to. Once you develop solid spending and saving habits, it’s easy to keep out of debt. This author had massive credit card debts just a few years ago but paid just $4.83 in credit card interest last year. It isn’t easy to get out of debt and stay there, but it is worthwhile.,
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