Live Free By Living Free Of Debt

Are you sleeping as well as you should? If you have a lot of debt, probably not. If you owe a lot of money, it’s probably keeping you up at night worrying about how to repay it all. Wouldn’t it be great to be debt-free?

Debt-free living isn’t something that the banks and finance companies spend a lot of time discussing. It’s easy to understand why: loans and credit cards is what makes them money. If everyone paid off their credit cards on time and had no outstanding loans (except perhaps for a house mortgage) then their business would be crippled.

That’s not going to happen, of course. Debt is now firmly ingrained in our culture. People hardly think twice about getting a loan — or running a credit card balance — in order to purchase things to make their lives easier. It used to be that most debt was backed by some kind of security — houses, cars, investments — but nowadays debt is being used to fund intangibles like vacations. This is a dangerous situation, because there’s no asset to sell that can be used to pay off (at least partially) the corresponding debt.

Finance companies make it so easy to get into debt, of course. How many credit card offers with “low introductory rates” have you received in the mail over the last year? How many times has your bank offered to extend you a line of credit based on the equity in your home, even though you haven’t paid off your mortgage? How many car companies have offered you low-interest or even no-interest financing in order to get you into one of their vehicles?

Just because everyone’s doing it, however, doesn’t mean that you have to wallow in debt. There are many advantages to debt-free living, but perhaps the biggest advantage is the peace of mind it brings you. If you’re living within your means and you don’t have huge debt payments to make every month, you’re almost guaranteed to be living a healthier and happier life. Your family will certainly notice a change — you won’t be a grouch all the time — and so will your friends. You’ll sleep better and you’ll feel better.

Debt-free living isn’t easy to achieve, but it can be done. Start by avoiding more debt: pay cash for things and don’t buy anything you can’t afford. Then work to eliminate existing debt using the “debt snowball” method: free up some cash and aggressively pay down each debt, one at a time.

Now avoid debt for the rest of your life. There shouldn’t be any reason to buy anything using debt, except perhaps for a house. But be aggressive with your mortgage: pay it down as quickly as you can — there’s no need for a 40-year mortgage.

Eliminating debt takes effort, but it’s so worth it — you’ll feel incredibly free when it’s gone! Living free of debt used to be the norm. Do your best to recover this lost art!

Tags: credit report score, business credit, credit card debt