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Some people think that owing money in life is basically inevitable. It’s easy to understand why some individuals have this mindset because a lot of people are in debt. In fact, it’s estimated that around eight percent of the country’s population are in some form of debt right now. Not just in debt but struggling to pay it back. Don’t forget it is possible to be in debt and be able to manage it. For instance, any time you have a house with a mortgage you will be in debt to the mortgage lender. But that doesn’t mean that you’re in a debt spiral, suddenly unable to handle your finances. That said, it is entirely possible to completely avoid debt through your entire life. Just because most people experience it at some point doesn’t mean that you have to. Debt is a nightmare, and it’s time to snap out of it and wake up.
Budget Budget Budget
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There is no one living in this world right now who can afford not to live on a budget. Even the richest one percent have budgets, they just have larger expenses. In many ways, this makes a budget even more important. So, if you live in a nice house and you’re on a lovely income, you might not think that you need to budget. But that’s a mistake because eventually you’ll overspend and end up in financial trouble. When that happens, you’ll have no choice but to borrow. Immediately, your time of living without the trouble of debt will have come to an end. Budgeting is just a matter of working out how much you make, how much you spend and using the difference to buy things you want.
If You Borrow…
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Make sure that you can afford the cost of the loan. There’s no issue with borrowing per se. The only problem is if the interest rate is so high that you can’t actually afford to pay it back. Then you end up in a debt spiral. So, only take out low-interest rate loans that you’ll know you’ll be able to pay back. Again, it’s a budgeting exercise. Work out how much you need to borrow and when you’ll be able to pay it back. Use a lender like Credit24, and you’ll be able to make sure you can always pay back any money that you take out.
Credit Cards Are Bad News, Avoid Them
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Finally, we need to talk about credit cards. Credit cards are just a way to trick people into living past their means spending more than they can afford. If you want to avoid debt, you need to make sure that you never bother applying for a credit card. This probably sounds easier said than done because there are plenty of massive expenses in life. We’ve just gone through Christmas, and there are probably a lot of parents with expensive credit card bills. You don’t have to be one of them. Instead, you can save through the year and avoid buying on credit altogether. No debt, no credit bills, no problem. If you buy on credit, you’re really just cheating yourself. You can’t afford to make the purchase, and the money you’re spending isn’t actually yours.
