Is it possible to live a debt free lifestyle? I know there are already a few readers that are saying, of course! I do it every year and never rack up any debt that I owe. Ah, but are you really debt free? Don’t forget if you rent a property, you’ll pay money to your landlord, your energy providers and the council collecting income tax. If you don’t have those bills set up as a direct debit on your account, there’s a possibility that you pay them late every so often. If that happens then technically for that small amount of time, you are in debt.
If you own property, you might still have a mortgage. Most people cannot afford to buy a house without some type of mortgage. That’s why you’ll commonly see the property being advertised that can be bought with five percent of the asking value. It means that you can be left with a staggering amount that actually just hasn’t been paid. Instead, you’ll be paying it back through mortgage repayments across multiple years of your life. If you ever fall behind on those payments, you’ll be in debt to the lender.
Or how about credit cards? I’m sure that you have at least one credit card that you use occasionally. Some people just can not resist the possibility. They love the idea of being able to purchase luxury items that they otherwise might not be able to afford. For instance, we’re sure you’ve bought a holiday on credit at least once. You can get the dream vacation without having to worry about the cost until later. I guess what we’re trying to decide here is whether or not it’s possible to live without borrowing money. The answer, unfortunately, it seems is no.
Borrowing To Survive
There are multiple times in life where borrowing is your only option. It starts at the grand old age of 18 where you’ll have to borrow to pay for your education. There’s no way around it because most colleges and universities charge thousands a year in fees. The only way to handle it is with a student loan. Despite what you may have been told once you earn a certain amount of money, this does need to be paid back.
At the same time, you may be attempting to move out of your parent’s home. At this point, you’re going to be looking for your own place to live and most people want a deposit. This ensures that if you damage the property, they are covered for any expenses.
Further down the road, you’ll be thinking about starting a family and buying your own home. With the best job in the world, you’ll still struggle to get a cash buy. Therefore, borrowing almost seems to be a built-in part of society. There’s no escaping it and no way around it.
However, just because you end up borrowing doesn’t mean you have to find yourself in debt. Or, rather find yourself in debt that you can not afford to pay back.
Avoiding Unmanageable Debt
If you do start borrowing money and I think it’s safe to say you will, you need to be careful. Make sure you are planning a budget and know what comes out of the account each month. If possible, you also want to a strong saving fun that you build up more each year. If you don’t do this, then an unforeseen bill could push you into debt quicker than you would like to imagine.
Remember, at a certain point, you may have debt owed to multiple sources. For instance, you could have bills to pay, credit card loans and repayments on a home. At this stage, if the debt is becoming more unmanageable, you may want to consider a debt consolidation loan. With a loan like this from a business such as LendingTree, you can wipe the slate clean. You’ll be able to start again, paying off the building debt as one easy sum. It’s also a great way to cut your debt down if you owe too much.
Although arguably, the best way to avoid this situation is to treat money with respect. There are plenty of people right now who think they can spend how they want when they want. Christmas is coming, and a lot of people will be treating themselves and other people. But you have to consider whether this is always a smart idea. Taking spending seriously is the only way to stay out of debt and eventually move towards a completely debt free lifestyle. If you save now, once you get older you won’t need to borrow anything at all. You’ll be able to buy everything using the cash that you have earned over the years.