Debt is often perceived as a necessary evil, yet it is very possible to live satisfactorily without going for debts or concerns of your credit score. Individuals with a bad credit past have little choice in this regard. There those who hate the whole idea of borrowing, or their principles cannot allow them to go for debts or pay interest. A loan company can be very enticing to be avoided. Incontrovertibly, living a debt free life is quite beneficial.
Before you begin stressing of your debts, you need to understand there are beneficial debts and terrible debts. Cash that you merely borrow to pay out, to buy your home, to set up an enterprise, to send out your kids to educate themselves is recognized as good debt. Financial obligations that stack up out of your charge cards and personal loans when you purchase products and spend on services are deemed bad debts.
Nevertheless, you need to be acquainted with the challenges as well as how to get over them if you choose such a course. For instance, failure to use credit means you lack credit history and thus a low credit score. This will make it so difficult to purchase some commodities. Still, getting back to the field of credit score can be a daunting task in case your plans change. In the meantime, debt is the most aggressively advertised monetarist product.
Does that mean we can hardly live without it? It is quite possible to have a debt-free lifestyle. The vast number of credit cards have stimulated the urge to reject credit advances in individuals. This article discusses the idea of living without debts.
To begin, life is much better when you live without debts. Nevertheless, there are some challenges associated with credit-free lifestyle, just as highlighted at the onset. Generally, living a debt free life isn’t an easy thing. Some people check for online loans like Bugis Credit to borrow quick cash to finance their debts. Debt free life requires adequate planning and concerted efforts to be successful in this regard. Many people have managed to embrace this way of living.
The following tips will be helpful if you as well aspire to live a debt-free lifestyle:
- Anticipate emergencies and save funds.
Many individuals tend using credit cards as a kind of emergency funds. Whenever there happens to be an unexpected occurrence, the card comes to their aid. Why not use the amount you are not paying for debts to create a health emergency fund? By so doing, you will avoid taking debts whenever emergencies happen.
- Save for goals.
Generally, individuals go for debts to undertake projects, or to keep their dreams lively. But is this the most appropriate course of action? Definitely no! Prioritizing goals is prudent. For instance, once you have established an appropriate saving plan, think of savings for the sake of your projects or set goals. Determine your priority and start saving funds for that purpose. One specific thing is that without debts it will be quite more comfortable.
- Obtain a Debit Card.
If you want to use a credit card in various situations such as for online purchases, you can alternatively opt for a debit card instead, especially if it bears the name of large credit company organizations. The debit card works in nearly all places you would require a credit card. It just cannot be accepted for products on credit. One good thing with a debit card is that it teaches individuals self-discipline when it comes spending. For instance, you must have funds before opting to buy a commodity or a service.
- Choose to earn interest rather than paying it.
Interest payment is merely a way of consuming your hard-earned cash. Besides, their interest options can be quite beneficial if you choose to save. For example, the compound interest option can help grow your investments with time. This implies that the money you would otherwise be paying as interest will be an earning that multiplies with time. What the right saving approach!
- Buy a car with cash rather than loans.
Unfortunately, this suggestion will be perceived impractical by individuals used to loan options throughout their life course, yet it is entirely possible. A good number of people have witnessed the practicality of this option. The total cost of a car may be double the cash price. Why not save the cash over time and buy the car with cash? Taking large loans can be very risky at times. Something undesirable may happen and render you unable to meet your loan obligations. In this case, you may lose the car itself or any other asset you may have attached to the loan as collateral. But if you save and buy the auto with cash, there are no such risks.
- Save for retirement.
It may be an issue of common sense, irrespective of credit condition; however, with no debt payments, it is prudent to save for post-retirement benefits investments. If not in debts, one can opt for early retirement.
Importance of Debt Free Life
It is prudent to do away with the notion that debt is unavoidable. Life is quite more comfortable when individuals are debt free. The rest of this article reviews ways in which one’s life can be better when he or she is debt free.
To begin with, an individual is at liberty to work less if he or she is debt free. The more financial obligation an individual has, the more he or she has to work to meet monthly deductions or payments. In contrast, with less financial pressure, people can freely quit too demanding jobs for satisfying ones, even though they may not be having good returns.
Also, one can decide to retire while still in the working-age bracket. While one might be aware of the significance of early retirement, debts can put limits on the amount of savings you deposit for the sake of postretirement era.
Lastly, you will experience less financial anxiety. A debt renders one a slave to the bank. The amount you need to pay can no doubt heighten your concern, especially in cases where payments get too uncomfortable limits. In contrast, an individual who only lives within his or her limits and does not depend on debts in any way enjoys an inner peace as well as financial security.
So far, we have examined the practicality of living with no debts. The points above prove that it is possible and even beneficial. Life is even better when one is debt free.