Saturday, July 28, 2012, AM | 15 Comments
Americans loathe debt but still they are the first in the world to get into debt. The problem is many get stuck in debt and are unable to get out of it. They would definitely like to get rid of debt as fast as they got into it. But can you really get rid of debt? I mean totally avoid it. No, I don’t think so.
You can control it if you try, but in this modern Western World, I don’t see any way to totally avoid it.
Debt can be good. Debt can be bad. Good debt can be your livelihood. You can make a better life, financially, for yourself and your family. But you must be in control.
A wise man once said:
- Those who structure their standard of living to allow a little surplus, control their circumstances.
- Those who spend a little more than they earn are controlled by their circumstances. They are in bondage.
Spending less money than you make is essential to your financial security. Avoiding debt is almost impossible in the Western World. Most folks would want to buy a modest home or pay for education or other vital needs.
However, the key to success and defeat the debt beast is to be in control.
Saving and Spending depend on our needs and wants
We must learn to distinguish between wants and needs. We should be modest in our wants.
Two kinds of mindsets are roaming the stores and shopping malls of the world.
Buy now, pay later (worse)
There are folks who believe that they must buy now and pay later. They forget to realize that they are borrowing or more importantly renting money from the creditors that are bound to become predators.
They become like an anaconda that wraps around its prey and just squeeze them to death. They suffocate them. These folks are bound to fall into the trap of the bad debt sooner or later.
Whether this kind of folks realize it or not, they must return what they had rented. Their family’s spending is governed more by their yearning than by their earning.
They somehow believe that their life will be better if they surround themselves with an abundance of things. All too often all they are left with is avoidable anxiety and distress.
Save now, buy later (better)
There are folks who believe that they must save now and buy later. They do not compare their lives and their lifestyles with others.
They try to live a modest life now and buy things later when they can even if they have to borrow some extra money. They realize perfectly well what debt is and how to control it.
They are the ones who follow the good debt path instead of the bad debt. They try to pay off their debt as soon as possible.
They know that paying off debt means that they must return the money to its proper owner by the mutually agreed upon date.
Discover Bank makes it easy to save now and buy later with its money market accounts and online bill paying.
A specific goal, careful planning, and determined self-discipline are required to accomplish this.
Gradually build a financial reserve, and use it for emergencies only. If you save a little money regularly, you will be surprised how much you would accumulate over time.
Set your financial house in order. If you have paid your debts, if you have a reserve, even though how small it may be, then should storms howl over your head, you will have shelter for yourself and your family and peace in your heart.
In a Nutshell
To say that we should avoid debt at any cost will not be fair to many folks. However, there is nothing that will cause greater tensions in life than grinding debt, which will make the debtor a slave to creditors.
- Aug 27, 2012: free burgers