Why You Should Avoid Debt February 25, 2011 at 4:08 pm
As we all know, it is easier to avoid things that cause problems than it is to try to fix them once we are already there and debt is no different. If you have debt, you are not only repaying money you have already spent but you are also repaying the interest that is being charged on that money. And today, interest payments can amount to a large percentage of the payment especially if you are only making minimum payments.
Avoiding debt is not really that difficult. It is as simple as not charging things on credit cards and paying off what you charge each month. Now, most of us will have debt in the form of a mortgage and many of us may have student loans. These types of debt are considered good debt, if there is such a thing. Hopefully, over time your home will increase in value and you will have an asset worth more than you paid for at the end of the mortgage repayment period.
Although student loans and mortgages are considered better forms of debt, it is important that you can afford them and that they are a good return on your investment. Credit cards can be a double edged sword if you are carrying balances on them. Not to mention the time and extra money you will have to use to pay them off and get back to a status of being debt free.
If you do not make plans for the purchase of high ticket items, you will find yourself spending a lifetime making payments. And anytime you are making payments, you are also paying interest for the use of money that is not yours. This can add up to hundreds and often thousands of dollars over time.
Debt can be debilitating and can cause problems in many areas of your life and avoiding it is the best way to manage it. If you do not incur credit card charges, you do not have to worry about where the money is coming from to repay this money.
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