Ditching Credit And Living In Your Means
When it comes to personal finance, nothing is more important than to learn to live without credit. This does not mean that you will not have credit; you may have numerous credit cards and a great credit score. It means knowing how to live within your income and appreciating why this is the best policy. There are people making a fortune by selling their debt elimination strategy. Others see it as a holy mission, to equip people with the financial tools and the structure to pay off all debt and live on a cash basis. Others are clamoring that leveraging your credit is the key to financial freedom. Banks trumpet the advantages of enjoying the good things of life by using their ‘Buy now pay later’ credit cards. Who is right? There is no denying that having no consumer debt has some great advantages. No more fears about missing a due date or having interest rates raised to crippling levels by a missed payment. No more realizing that every item bought on credit costs far more than it is worth. Increased flexibility to plan ahead for the future without paying for the past. Wrong. If this strategy worked, the average debt for consumer-oriented Americans would be in negative figures. Anyone who reads or listens to the news knows that the opposite is true. Not even counting student loans and mortgage debt, the average American of credit-worthy age is burdened with $10,000 in consumer debt. Credit experts almost all agree that going ‘cold turkey’ is the only way to start on the road to recovery. Cut up the cards, track expenses obsessively for a month or two until you know where every penny goes, and then make a budget. There are many tools to help you create a budget, and there are many, many more who believe they can operate without one. Those who succeed in eliminating their debt almost always have a budget which they follow meticulously. What is wrong with debt? Owing money is a very real of loss of freedom. It is hard to save money when monthly payments take up all the slack in your paycheck. You are unable to take an entrepreneurial challenge (unless you do it on credit), switch to a more congenial job that pays a little less, spend extra time with your family, or do something wild like join the Peace Corps. You must labor on for your employer to get the money to pay the bills for things that you bought long ago and may not even be still using. If you factor the price of any object bought on credit - the total price - you would probably never pay that much up front. The compounding of interest is a business strategy that makes the credit companies rich beyond belief. Getting out from under the charges placed on consumer debt is like a labor of Hercules, and you may feel that it will never happen in your lifetime. Do not decide to keep the car and give up fun. Not only do you need fun in your life, but you often interact with friends and family while playing. Just have fun that does not cost much. Make a kite out of heavy junk mail and straight sticks - you can probably fit a little string in the ‘Fun’ category of expenses - and fly it; all concerned will remember both the kite and the excursion. Pull out all the local team paraphernalia and watch the game on TV in style - Take a walk with the whole gang - get together for cards or board games - talk to each other (hot air is free!). In other words, track your expenses, figure your income, and make the act of staying within it an art, not a penance. You can do it! Looking to get your cash back from mis-sold ppi? Then visit www.PPIClaimsUK.co.uk to start your PPI claim today. |