Live Free By Living Free Of Debt

If you have a lot of debt, you're probably not sleeping as soundly as you should. There's something about having lots of debt that keeps you up at night wondering how you're going to be able to repay all the money you owe. Wouldn't it be nice to be free of debt?How to live free of debt is not a topic that most banks will discuss with you. After all, their bread and butter derives from the interest they make from loans and credit cards. If no one borrowed money from them, their business model wouldn't work at all -- they need consumer debt to make money.Luckily for them, debt is no longer a taboo subject in today's society. No one thinks twice about getting a loan these days, or running a credit card balance. In the old days, debt was always backed with some kind of asset -- a house or a car, for example. You could always sell the asset to pay back the debt (or a large part of it). These days, however, debt is used to buy intangible things like vacations, which is a dangerous situation, because you're on the hook for the whole debt.Banks make it easy to acquire debt, of course. They send out low-rate credit card offers all the time. They offer to extend you a line of credit for the equity you've built up in your home, nevermind that you haven't even paid off the mortgage yet. Finance companies do it, too, offering no-interest or reduced-interest payment plans for buying cars, furniture, vacations, etc.Don't follow the crowd and wallow in debt, however. It's hard to live free of debt, but it brings many advantages. The biggest advantage is that it brings peace of mind. When you live within your means and avoid large debt repayments, you'll live a better life. You'll be happier, your family will be happier, your friends will be happier. You'll sleep better. You'll feel better!Going debt-free isn't easy, of course. The first thing you need to do is to eliminate your current debt, which involves two steps. Step one is to stop increasing your debt -- start paying for things using cash and stop buying things you can't afford. Step two is to free up some money to start aggressively paying down your debt using the "debt snowball" method.Now avoid debt for the rest of your life. There shouldn't be any reason to buy anything using debt, except perhaps for a house. But be aggressive with your mortgage: pay it down as quickly as you can -- there's no need for a 40-year mortgage.Debt-free living used to be the norm, but not anymore. Very few people realize how liberating it can be, however. Do your best to rediscover this lost art!
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