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Debt Free Living - 5 Tips To Get Out Of Debt
by Justin Koh
A few times I wonder what sort of credit system moved the global economy 200 years ago. If the intention of getting into a business is meant to 'help'
fulfill the needs and wants of someone, I don't see how credit card salesmen
can drove more people into debt and backruptcy. Clearly most people fail to
have a good understanding of the increasingly sophisticated (and
complicated) terms and conditions behind the card they apply for, how it
benefits the bank more than the applicant and what the ubiquitous card is
best used for.
The 'cashlessness' of the advanced world surely works its illusions into the
minds of those caught up in the disease of consumerism, who found it too
easy to buy anything anywhere with a flash of the card without realizing the
interest incurred to the bank everytime a purchase is made. Before you get
the math right, you must get personal spending principles and habits right
first, and only then you will attain self-awareness and a conservative
mindset that lights up a red warning in your head just when you are about to
make a purchasing decision.
Here are 5 tips for you to get a headstart:
1) It's not how much money you make (or spend); it's how you can keep. I
didn't say this. Robert Kiyosaki said it. Far too often poor people never
carry happiness within themselves and depend on external sources for their
own happiness, so they either buy to impress others or get a certain 'nice'
indulgent feeling for having new things. Mathematically speaking, if that
new thing does not serve a purpose or even a significant function, it is a
wasted loss.
2) Forget credit; get debit. A debit card is quite similar to your ATM card
in that it deducts directly from your account on purchase and can be used
worldwide. The credit card enables you to BORROW money from your bank to fulfill a particularly expensive purchase provided you pay back the loan
PLUS the interest incurred in the form of monthly bills. Based on track
record, if you have always fulfilled your credit obligations, your credit
ratings will get better, leading to better protection and concessions. But
unless you typically deal with large transactions and understand your
spendings cycle, you are better off making your life simpler just knowing
exactly where YOUR money--not the bank's--goes if not into your account.
3) Be conscious of your financial balance. Do a monthly plan-and-review for
your savings and expenditure. Those items that you have to buy with your
card...how necessary and regular is it? Why is it an investment to you and
to other people like your family? What else can be cut down? Sometimes you
must realize your financial decisions do impact your immediate loved ones
and this is a significant consideration to take care of.
4) Use your card only for emergencies. I don't know how many times I've been reminded by my elders but don't get rebellious for the sake of it.
5) If you are facing a tighter budget, you did better confront the problem
sooner than later. Discuss with your immediate loved ones and financial
advisor where the finer problems lie and they are sure to help, not to
aggravate your situation, because if it doesn't affect you, it will affect
them and your relationships.
The debt problem is not one on a personal scale but a prevalent one
worldwide. It is a sickness infecting people who grow too worried witnessing
the exorbitant increase in the cost of living everywhere they go, whether
it's in the New York or Kuala Lumpur, so they keep on borrowing in order to
'stick their neck out'. Wrong thinking: it becomes a vicious cycle that
feeds on itself, pushing you closer to losing it all than ever before.
Come one day, you finally wake up from your debt problem when the bank or
creditors start knocking on your door, and you don't want that to happen.
Stop being influenced by what goes on around you but to take good stock of
your financial attitude and well-being. You have a choice not to get
involved with your bank 'deeper' than you need. It's time to be happy living
within your means. Be grateful for what you have now and work the most out
of your current resources, then you will find better use for your pair of
scissors than to cut up credit cards.
Justin Koh is a freelance writer whose articles have appeared in most major
ezines. You can find the latest news and articles at:
http://www.debtcenter.info
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