You have no money. In fact, you owe money. Does this sound about right? No matter how old or young you are, most of us have had some experience being in debt.
Now, you say if only you would make more money would you be out of the hole. But the truth is 99% of us will not save money more if we received a raise. SAVING MONEY HAS VERY LITTLE TO DO WITH THE AMOUNT OF MONEY YOU HAVE.
The only way to get out of debt is to understand why you are in debt. Understanding why you are in debt is the first step to controlling and eventually eliminating it.
Here are ten reasons why you might be in debt:
1. You use credit to buy things you cannot by in cash/when you do not have cash. This is simple - if you cannot pay for it in cash today, you cannot afford it.
2. You buy stuff you do not need. Shopping is not a source of entertainment and retail therapy is not really therapy. The feeling of instant gratification of buying something is temporary. But you know what kind of gratification lasts longer? Delayed gratification. Why? Because you know you truly earned it.
3. You believe buying a more expensive brand means you are getting a better product. Sometimes this is true, but a lot of the time you are just buying the name. You have a problem if you are buying something largely for the brand behind the item. "But my friend has one," you say, but your friend is probably in debt too, so stop.
4. You buy a brand new car every couple years. A car is supposed to get you from Point A to Point B. If your current wheels continue to run strong, keep it. What is more important to you - living debt free or the new car smell? Plus, it is simply irresponsible to pay interest on something that decreases in value so drastically.
5. You pay full price for something. Wait for sales, shop at discount stores, look for deals online... Planning ahead and doing some research will save you a pretty penny.
6. You do not budget. You have to plan to pay off your debt. You also need to make sure you are spending less than you are taking in.
7. You are not saving. One word: Automation. You have to plan for your future as well as the occasional surprise expense (Can you say Emergency Fund?).
8. You are house poor. You own or rent a house way bigger than you need. Not only do you pay more for the house, you spend more on maintenance, utility bills, and stuff to fill it up.
9. You spend money on shit that is bad for you. Why are you spending your hard-earned money on things like gambling, smoking, and drinking? On top of that, major health problems that often follow will cost you more money down the road!
10. You fail to become money smart. Do you need to become a financial expert to get out of debt? No, but you need to know the basics. Like know that simply paying the minimum will not evaporate your debt. Or what your interest rates are (and that you can shop around for the best rate). Or know what you take in and what you ship out.
At the end of the day, it takes discipline to get out of debt. It also takes discipline to live below your means. But it does not mean your life will not be rich - true wealth is not measured in objects. So do you want to look rich or actually be rich?
Now, you say if only you would make more money would you be out of the hole. But the truth is 99% of us will not save money more if we received a raise. SAVING MONEY HAS VERY LITTLE TO DO WITH THE AMOUNT OF MONEY YOU HAVE.
The only way to get out of debt is to understand why you are in debt. Understanding why you are in debt is the first step to controlling and eventually eliminating it.
Here are ten reasons why you might be in debt:
1. You use credit to buy things you cannot by in cash/when you do not have cash. This is simple - if you cannot pay for it in cash today, you cannot afford it.
2. You buy stuff you do not need. Shopping is not a source of entertainment and retail therapy is not really therapy. The feeling of instant gratification of buying something is temporary. But you know what kind of gratification lasts longer? Delayed gratification. Why? Because you know you truly earned it.
3. You believe buying a more expensive brand means you are getting a better product. Sometimes this is true, but a lot of the time you are just buying the name. You have a problem if you are buying something largely for the brand behind the item. "But my friend has one," you say, but your friend is probably in debt too, so stop.
4. You buy a brand new car every couple years. A car is supposed to get you from Point A to Point B. If your current wheels continue to run strong, keep it. What is more important to you - living debt free or the new car smell? Plus, it is simply irresponsible to pay interest on something that decreases in value so drastically.
5. You pay full price for something. Wait for sales, shop at discount stores, look for deals online... Planning ahead and doing some research will save you a pretty penny.
6. You do not budget. You have to plan to pay off your debt. You also need to make sure you are spending less than you are taking in.
7. You are not saving. One word: Automation. You have to plan for your future as well as the occasional surprise expense (Can you say Emergency Fund?).
8. You are house poor. You own or rent a house way bigger than you need. Not only do you pay more for the house, you spend more on maintenance, utility bills, and stuff to fill it up.
9. You spend money on shit that is bad for you. Why are you spending your hard-earned money on things like gambling, smoking, and drinking? On top of that, major health problems that often follow will cost you more money down the road!
10. You fail to become money smart. Do you need to become a financial expert to get out of debt? No, but you need to know the basics. Like know that simply paying the minimum will not evaporate your debt. Or what your interest rates are (and that you can shop around for the best rate). Or know what you take in and what you ship out.
At the end of the day, it takes discipline to get out of debt. It also takes discipline to live below your means. But it does not mean your life will not be rich - true wealth is not measured in objects. So do you want to look rich or actually be rich?
