A DEBT-free life is something that a lot of people aspire to have. And yet it is a known fact that sadly, many will never attain it because of their unwillingness to make the necessary adjustments in their lifestyle to make it possible. I am talking about people who continue to accumulate debt for immediate gratification (i.e., the “I want it, and I want it now” mentality) instead of making temporary sacrifices for long-term gain. The truth is that most of the good things in life take time, not overnight.
Of course, not all debt is bad debt. For example, if you are borrowing money to start a business or purchase a home with the intention of making a profit, there is an expected return on your investment that may justify the loan. But if you are borrowing money to purchase a rapidly depreciating asset, you may end up paying the debt back for the rest of your life way after the item you purchased has become worthless. So there is a difference between a “good debt” and a “bad debt”. Or how about those people who have no money to go on vacation so they end up charging everything on their credit cards? And then they dread getting their credit card statement the following month because they know that they’ve spent more than they can afford.
In this article I would like to talk about how it may be possible to live a life that is free from the stress caused by excessive indebtedness. If you are currently stuck in too much debt, perhaps you should ask yourself the following questions: What led me to this difficult financial situation? Could I have done things a little differently and put more thought into my financial decisions? These are important questions to ask because unless we learn from our mistakes, we are bound to repeat them again.
Large debts start from small debts. Oftentimes, people are caught in the vicious cycle of borrowing because it is too easy to get credit these days. They fall into the trap of thinking that they can make small minimum payments, anyway, so what’s the big deal? Before they know it, they can’t even afford to make the minimum payments on their credit cards. That’s when the problem starts. Unless credit card borrowing is controlled, it often leads to bankruptcy. I know because as a bankruptcy attorney, I know that credit cards are the main reason people end up in bankruptcy court.
Borrowing more money than you can pay back is not only irresponsible but will have serious implications for you. All actions have consequences and if you are not careful, you are likely to regret what you’ve done. You need to stay on top of your debt balances at all times and know exactly how much you owe, how much you’re paying in interest charges and how long it will take you to pay the debt back. It’s a good thing that credit card companies are now required by law to print this on your monthly statement. Is it working? I don’t know. Apparently, some people don’t even read what’s there. Many times I’m shocked to hear from people that they don’t even know how much they owe because they’ve lost track. If this is you, you have a financial disaster waiting to happen. It’s just a matter of time.
Another thing that gets most people in financial trouble is spending more than they make. Their expenses are simply out of control and they are paying for a lot of things that they don’t even need or can afford. They have huge mortgage and car payments that are way too high for what they make and they are living a high-consumption lifestyle that makes them look good on the outside but unknown to their friend and family, they are financially broke and they have zero savings. They are living a lifestyle financed by the banks and credit card companies and once they lose their income, they lose everything overnight. Why because they own nothing. They’ve mortgaged everything they own to the greedy banks and financial institutions who are happy to loan them money in exchange for blood.
If you wish to live a debt-free life, you need to develop the personal discipline of spending less than what you earn. Did you hear that? I know it sounds simple but that is the only way that you can ever save. If you think you may be over-extended in debt, make it your priority to repay your debts so that you are not wasting money paying interest charges. This is money you should be saving, not giving away to the credit card companies.
Don’t get me wrong. Being in debt doesn’t make you a bad person. If you’ve made some mistakes in handling your personal finances, acknowledge responsibility for where you are and find a way to change course if you are going in the wrong direction. Yes, a debt-free life is possible but it takes work, dedication and prudence in making financial decisions For a free consultation, call my office at 866-477-7772. I have offices in Los Angeles, Pasadena, Cerritos and Valencia.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772. (Advertising Supplement)