Can you Live without Debt and Credit?
Turn around and all you see is the prevalence of credit and debt. People everywhere make their everyday purchases with plastic. Most purchases made in car dealerships are financed. Presently, all large purchases are made with credit cards. If you think the situation only prevails outside of your home, you are wrong. Some luxuries that we actually don’t need and can’t afford are present right in our own homes. Every commercial aired on the television lures us into more luxuries that seem essential. Adding to the list is internet shopping, which can mount up your credit debt in no time.
At some point, a series of question arises – Can you live without debt and credit? Can you run your life smoothly without a credit card? Can you avoid borrowing money to buy houses and cars? Even though the present culture is rapidly evolving, can you make every single purchase without the use of plastic?
The answer is yes. It is possible to live without debt and credit. All it takes is a good debt management plan to make this work. Living a life without debt or credit might seem difficult, but it’s possible with a considerable amount of discipline and planning. Here are a few ideas that can help you live a life without debt:
Emergency Funds – Many people use their credit cards only when there is an emergency. You can try saving up money to build an emergency fund. The money you aren’t paying towards debt can be used for this purpose.
Earn Interest – If you use a credit card, you tend to shell out your money toward paying interest. Make your money work by investing it. Your investments can grow with compound interest. The money that you would have originally been paying towards debt can now be multiplied and offering interest.
External Credit Cards – In case of bigger emergencies, call upon a friend for help and ask to use their credit card. Remember that your emergency has to be genuine and worth it. Instead of paying the interest to a credit card company, you can pay back the amount to your friend on a schedule or agreed upon date.
Budgeting – This rule is simple. Create an effective budget and stick to it. Analyze your bills and determine what you really need and what you don’t. Once you distinguish the difference between necessities and luxuries, cut down on the latter.
A credit card will make you spend money you don’t have. Unfortunately, the realization sets in too late. Instead of panicking after a credit crunch, start implementing credit debt solutions. There are critical areas, like shopping, education and housing, that can make you splurge and falter. Start living debt-free and soon you’ll be able to impart the same wisdom onto others.
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