Many of us have come to see debt as a way of life. Chances are your parents carried debt, but they may not have explained the stress involved or the extra hours worked just to stay afloat.
The truth is that while many people do live in debt, it’s not something you must do. Let’s take a closer look at some reasons you should avoid debt.
You Never Know What’s Going to Happen
No one knows what’s around the corner. It may be unemployment, illness, or even a natural disaster. The truth is there are so many things that can financially destroy you. The last thing you want to worry about when your savings has been wiped clean is how you’re going to pay your credit card bills. Nothing is for certain in life and living in debt is just putting yourself in a risky position.
Debt Makes Things More Expensive
Sure, putting something on a credit card allows you to buy the things you want, but those things end up costing a lot more. Many credit cards carry 18% or more interest. Think about how much something would cost with that kind of interest rate.
In most cases, you’ll end up paying 3.8 times the original purchase price of an item. So, let’s say you buy a $1000 TV on credit and pay minimum payments, that TV will end up costing $3800. That’s quite a hefty fee for instant satisfaction!
It Takes FOREVER to Pay Off
While you may have the best intentions, many people get their bill and make a minimum payment. This means that you’re usually pay just a little bit over the interest fee each month. In other words, it will take forever to pay off that debt.
Eats Up the Money You Could Be Saving
Instead of having money to put into savings each month, you’re putting that money towards your debt. This means that it’s harder and harder to save for your future. What’s more important – having something now or being able to actually retire?
The Stress Will Eat Away at You
Every month, you’ll sit down to pay those bills and regret making those purchases. Chances are you’ll be paying for items you no longer even have. It might be clothes that wore out or toys your kids outgrew. Do you really want to lose sleep over such things?
Debt may be common in the United States, but that doesn’t mean you have to accept it. Take the time to save for the things you want and build a savings account for emergencies. You’ll be a lot better off in the end and a lot less stressed.