Most people agree that debt is a bad thing . This debt I’m talking about is not about havinga home with a reasonable housing loan or having a car with low credit rates . I’m talking about your credit card debts that you’re having trouble paying each month or housing loans that will cause you a long-term frustration like 20 years . Or other long-term borrowings. You need to perform debt management .
Here are five reasons why these debts are your enemies :
1. Everything you buy will be more costly
Any spending you make with your credit cards reduces the amount of money you can use to reduce your debt . Because you pay interest on your debt , even if you don’t use your credit card to buy new things, you pay interest on every new purchase. So, if you don’t buy new things, you can use your cash to reduce your debt so that you’ll pay less interest on your debts.
2. Reduces Savings Rate for Efficiency
Carrying a debt means paying interest on your debt instead of dealing with your savings. If you do not pay any kind of debt you have a compound interest to work against you and you will have to pay continuous interest. In addition, all your debt payments make payments for something you have bought in the past are funds that don’t fund your future pension . Therefore , you should keep your maturity as short as possible.
3.Enhance your living standards
You will need more than your pensions to maintain your living standards when you are retired. Because when you retire, your salary is more than you think. For this reason, you should try to close your debts before your maturity by forcing your opportunities and you should invest in your retirement period when you are young.
4.Considering Survival Expenditures to Yourself
If you are paying a debt with almost all of your income instead of some money for an emergency, you will not be in a position to pay a surprise. Homeowners and car owners know this very well. When you have no money at all, your car can be charged at a location or your home is flooded with events like this. Or even if you have insurance, you may have to spend money on a major health problem. Since it can make you difficult to manage when you are in debt, we should avoid unnecessary spending for emergency situations and limit the maturity of our debts.
5.Borch Causes Stress!
Having a credit card debt and knowing that you still owe it to what you buy is the main reason for stress. Those who pay credit card debt all year for the holiday of 10 daysknow this situation better :). Even if people lose their jobs, even for people with a plan to pay their debt for a year or two, worrying about what will happen can harm health or marriage issues.
I know it’s not easy to get out of debt. For most people who cannot find ways to make more money in their careers, they need to make changes in their lifestyle. An important step is to start making changes to your spending habits . Even minor changes can cause incredible effects.