Have you ever thought about how life would be different if there are no debts? The consumerist culture of our days forces people to buy stuff that they cannot afford.Of course it’s nice to enjoy all modern conveniences, however with all the pleasures of having comes the responsibility of paying off the loans and mortgages.Debts are among the major sources of stress and anxiety backed by uncertainty in future and fears of losing property. It’s obvious that life without debts is much happier, so if you are looking for some tips on how to get to the point of being debt-free follow these 5 simple motivators.
1. Stay sober and in good spirit
Always remember that debt will add more pressure on you. There is nothing good for your health and wellbeing in constant stress. It was reported that stress affects your health and causes psychological disorders. At the end of the day your life and health are the only things which matter. Debt and stress will also cause you to make bad life decisions. So before contemplating about taking out another quick loan just think that above the interest you will have to pay, this new debt may take away you healthy and happy life.
2. Credit score and your reputation
It’s almost vital to have a good looking credit history. It tells a lot about a person. It resembles how reliable, responsible and trustworthy you are. Credit score shows your ability to plan finances. Taking extra one loan will be noted in your credit score. Besides any delays and miss pays will damage you financial reputation. Think twice whether new debt is worth of sacrificing your future.
3.With credit cards come hidden expenses
You will be surprised how much you pay off for using credit cards. It’s like buying a house. If it costs $80,000 now, in 30 years you will pay off $192,000. The same situation is with much smaller loans. When we deal with smaller numbers it’s easier not to bother yourself with counting how much money is lost. A 14% interest rate credit card with $1,500 of your monthly expenses will generate fee of $17, 5. A very insignificant amount, but if you don’t pay it back, in 5 years it will grow up to 2500, in 10 years it will be 3600 and so on. So before getting another credit just think and calculate and include not only the price but how much will you have to really pay with all of the credit card expenses.
4. Invest instead of spending on debts
Investing requires some funds available. Piles of credit card bills and other loans you will leave you with no cash for investing. With debts you are losing a lot of opportunities to improve your life in the future. Think about those business ideas you have or invest into residential property – all of those ideas can make your money work for you. Smart and effective personal finance management in 5 years can save you enough for purchasing a house.
5. Be ready to face unexpected
It’s hard to predict what tomorrow brings. Just imagine if something unexpected happens in your life and you still have debts. Coping with illness, job loss or other unforeseen circumstances can be much easierif you have some savings or investments and especially if you are a debt-free person.
Getting out of debts is not an easy task but if you consider these simple motivations and set yourself a goal, you can get rid of debt burden within the next 6 to 12 months.