Debt101 Archives - MoneyWatch101

What is Debt?

This is the piece I wrote on debt and I wanted to share a different aspect in describing debt to all of you today. Debt is really bad as all of you already know, and possibly you’ve read some debt articles in countless past publications. But what people don’t share on the vast web portals and pages, is that debt doesn’t define you in any way. The personal finance community has a fair share of indebted folks, and they are all truly supportive in helping anyone who really wants to be free of debt, find ways to eliminate the debt monster. What is Debt? Well it is an obligation to pay for something in the future you purchased in the past.

One thing that I continuously hear is can people actually live life debt free. I believe you can, and I am 1 step closer to it every day. The freeing feeling you will realize is the prize, and the gift you give yourself by tackling the immense debt freedom journey until you reach a new financial platform. Many people take the journey for granted but it is that journey that will lay the foundation to help you avoid getting back into debt in the future. I will now do my best to define debt in another financial poem below. Have fun with it and let me know your thoughts.

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Never Trade Freedom for Debt

Hello readers its that time to discuss again the trap that people place themselves in every time they sign a new contract involving debt. When you stop and think about past choices it really is simple, try to do your best to never borrow again unless you want to live indebted forever. Just the other day I read a blog post by Derek over at lifeandmyfinances and he is now living life completely debt free for over a year now. He is an inspiration and an example of a life we all should try to realize 1 day. I believe it’s necessary for my sanity to never trade freedom for debt.

Granted it might feel like a never ending battle in this modern society with a constant emphasis on living with payments and debt. I will tell you that it can be done and to never ever have a defeatist attitude towards your financial insecurities. When you expect failure from the beginning, I guess the path towards reaching prosperity will not be possible. Getting into debt was a choice way back in a moment in time, so why can’t the choice today be made to reverse those bad actions. By not conforming to the norm you will elevate yourself to a term many people don’t use today.(Financially Responsible)

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The Real way to get out of Debt

Do you want to learn the real way to get out of debt? I know some of you think that holding on to debt is ok, as long as the payment is manageable. Everyday people in this society take out loans to fund an expensive purchase, while rewarding the lender with payments including an interest rate. The difference people must realize is that buying on future credit is really hurting how financially sound you will be now in the present, in addition to the future.

Who really benefits when you take out a loan? Yes you get a car you couldn’t afford, and maybe you finally can get that expensive computer so that you can blog from home. If you did not plan and save for major purchases, then you just lost out and the lender wins. They even win if you get a 0% percent financing deal. The cash flow drain by getting a loan hurts your chances to save for a secure financial foundation. Thus you become dependent on your job to maintain a pay as you go life, which can really mean living paycheck to paycheck for those people excessively indebted.

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Why I want to be Free of Debt Forever

I could give a thousand reasons why I want to be debt free, but for today’s post I will share with all of you just 1 reason. Debt freedom is truly the way to live I believe. Because when you are you feel a sense of power over finances. Owning others is a straight path to having less cash flow month after month. In addition to having mounds of added stress.

Now lets discuss my reason why Debt will be out of my life soon. But before I do lets look at this awesome quote:

Eliminating debt is not only important its everything – Rich Uncle EL

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What is the Daily Interest you pay?

Hello friends I want to ask you an important question today, what is the daily interest you pay on any loans you’re currently holding? If you do this research it will take you no more than 15 minutes to complete, and did you know it can help you be debt free sooner. Most lenders charge a daily interest amount, and you can find it by multiplying the full balance owed, by the (APR) Rate, then divide that by 12 to get the monthly amount you are being charged.

To take this calculation a bit further divide that amount by 30 to give you the daily amount you pay in interest. Doing this financial exercise can make you aware of what’s beilng robbed from you every day by holding that horrible debt.

The Average Person will Pay 279,000 in interest payments. (See Below for the article)

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The Pay Debt Now Method

If you could be debt free today would you pursue it? Why for heaven’s sake do people seem content to stay burdened for so long, sending only the minimum for years to lenders. I don’t know about you but I want my future income to be all mines and not some banks. Do you know the banks are smiling every time you send the minimum in month after month? That means they have you beholden to them for that much longer. Hence you are their bank roll and source of future revenue. Keep reading so that I can explain further how we all can use the pay debt now method to change our lives.

Enough is enough and I want you all to do well financially. It’s time for a change with how we view credit and debt. If you can’t afford expensive items, think very hard if you will appreciate it after 5 years paying for that product, Time is good at making most of us seem like our choices didn’t make sense back in the past. Now that you understand the thought process, how can you solve debt issues today?

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The Best Excuses Why People are in Debt

THe Best why people are in debt excuses — Do not let Excuses get the best of you.

How many excuses have you heard regarding the ability of people to get out of debt? I will feature here The Best Excuses Why people are in Debt. I believe those excuses are a way for individuals to place a barrier around not confronting the person in the mirror, and ultimately how that debt should be eliminated. I have read some of these and I have heard people actually say these to me. Now the people that said it to me, instead of giving excuses, did it ever occur to you that its easier to just asked for help with the debt.

The thing is I feel that they are not ready for the financial help. It takes hard truths and real struggle for people to change. Plus people might feel ashamed to disclose their entire financial disaster, and finally what they really owe. If you find the right mentor, they can steer you in the right direction how to tackle the debt monster. I feel their are so many methods, but the two most widely used methods that come to mind are the Debt snowball and the Debt avalanche. See Below for The Best excuses why people are in Debt.

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What it means to be Debt Free?

The premise of what I want to discuss with you today is not given much attention in our current society. But this site will be a bit different and enlighten you to get a basic understanding of what it means to be debt free. There’s been a lot of talk recently about reaching the pinnacle of financial freedom, the crossover point where your finances can cover expenses with no problem. The wishing well from others trying to reach this status in life is very high, but before you dive in to begin your FI journey please keep reading.

Everyone who wants FI must reach a very critical stepping stone, and that step is called debt freedom. People this is a wakeup call, because money sharks are out there ready to take your cash flow away from you. For a few examples look at that new shiny credit card offer, or the new sedan waiting to be driven off the lot, plus never forget the always modest student loan. Many of these debt perpetrators can be halted, by telling the reflection in the mirror, I will not borrow money under any circumstances.

If you can successfully go 3 years without borrowing any money, then you can finally reach debt freedom. The average American consumer reaches debt freedom in 18-36 months if they can keep new borrowing at bay. (Which means Never Again?)

Now I will show you how getting to that step will elevate your finances to work extremely hard for you and possibly help you reach the pinnacle of finance. In a few examples below I will show you several cash flow killers. Once you rid them from your life one by one, then invest the amounts below consistently you can be wealthy.

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