For some reason American’s love to live with borrowed money. Whether it’s the govt. or the citizens. The debt burden is huge. To get a quality education you need to be in debt, unless your parents can afford the cost of education. Still debts like student loans and mortgage are good loans. at least the purpose of taking out those loans is good. you are actually investing the borrowed money, either in your future or on an appreciating asset, your home.
But the moment you start borrowing to buy things, like car, TV, appliances or just your daily expenses, it becomes nasty. Since the invention of credit cards and loans, to get goods and services through credit has never been easier. People owe money to not only banks but also, friends, co-workers, family members as well. These are the habits, you need to train your mind to avoid!
Owing debts can become a habit or depressive state of mind. In such situations, individuals start accumulating debts that can even be passed onto their children. This problem has caused many to lose their jobs, friends, family members, co-workers and even their own lives.
We are going to be looking at 3 ways you can train your mind to stay out of debt
Habits like taking drugs, smoking, drinking are highly addictive and can cause serious debt problems. Buying food from outside vendors seems not too expensive in the short run but in the long run, it is very expensive and can even turn into a habit.
Try this test. Calculate the money spend on buying food from outside for a time period say a Month. Cook for one Month and compare the difference.
Other money sucking habits are smoking, drinking and drugs. If I just leave out the life threatening consequences, still the financial impact is just huge. I published the financial impact of smoking before since I was a smoker once, I know how much money it cost for a pack of cigarette.
Do a not fall into debt trap and hope a financial advisor will get you out of debt. No one knows you as you know you. An adviser will only tell you what they have learnt in school. Get a job that you enjoy, make good friends that you can engage in activities together. Don’t be selfish. Try to think generationally since your debt can pass onto your children.
- Savings: Developing a saving habit is a very effective way to stay off debts. It shouldn’t start with a million. Rather, start small. Create little savings at home and keep them in saving accounts. Try out different money-saving ways to do things. Keep the money saved aside. Slowly but surely your savings will grow.
- Investment: This is one essential way to make your savings grow. When you don’t need to use your saving, keep them invested. An investment, like in shares, bonds let your money grow faster than the rate at which it will grow in the savings account. Assess your risk appetite and make your investment decision accordingly. You can also buy properties like Houses, Cars, Land.
Don’t have a low paying job and try to buy the car, send your children to expensive schools because your friend, family member, a co-worker has that car or send their children to such schools. They might be earning more than you. People also turn to compare on the vacations they take.
There are sites on the internet that sell cheap second-hand cars; give you discount deals on vacations flight and even coupon codes to buy services.
One suggestion I often give here – do not keep up with the Jones. Do not borrow money unless it’s absolutely necessary. Do not show excessive kindness, be practical, do not lend money to someone knowing that you may not be repaid. You’ll end up losing the friend and your money. It’s always better to just lose your friend. And a good friend can understand your concern.
Do not follow the Joneses, let’s not aim for luxury. Buy things that you can afford. While using your credit cards, buy things which you can pay off when the bill is due. Your character is an essential feature that’ll prevent you from wasting your money in gambling and alcohol.
A good character will help you in multiple ways. You’ll get a better job, better raise. You will attract stronger people around you, you’ll establish contacts. If you have a business, your character will attract more customers. Which will result in more sells and more profit.
To become a successful it takes some hard work not just on building wealth but also on character. There are many examples where rich people have brought their lives to ruin due to bad character.
Only you have the power and will to stay out of debt. You want to reduce expenses at all cost. train your mind to avoid buying things unnecessary, look out for better job prospect, better salary, more raise. Invest your savings and maintain a strong mind and habits. Do not waste and don’t let others waste.
I have stayed out of debt, except my mortgage. I encourage you to adopt a mentality of spending less than income. That’s the only recipe for staying out of debt.
Readers, share your story, share what you know.