Do you want to get out of debt but can't find the motivation? Do
you dread the mail arriving in case it brings you even more
bills to pay?
Well if you need a burst of motivation to improve your financial
position, I've put together five reasons to get out of debt and
avoid borrowing in the future.
1) Everything that you buy becomes much more expensive
OK, I'll show you. While out shopping you just can't resist
buying a new plasma television. The price was $2300, but it has
been reduced to $1995. Bargain! So you sign up to an attractive
looking credit agreement.
How much will is cost? This is not a trick question.
$1995? Wrong!
Whenever you borrow to buy something, the total cost to you is
made up of three distinct parts.
a) The actual amount that is borrowed - $1995
b) The interest on the loan - Perhaps 3 years at 29.9%
APR. That would come to $915.78 (36 payments of $80.85 less
$1995)
c) These payments must be made from your taxed income -
Let's say 30%. That would add another $1247.40
So taking all of these things into account, you'll have to earn
an eye watering $4158 to pay for your television.
And that's before we take into account the opportunity that
you've lost to earn interest on the money that you're using to
make the loan repayments. At 5% per year over 3 years this could
amount to another $300 in lost interest.
Doesn't seem such a 'bargain' any more, does it? Do you really
want it that much?
2) Lack of Freedom
The world is full of credit junkies. Too many people hold a
'must have' attitude that they simply can't afford.
Unfortunately, this position translates into a 'must borrow'
state of mind. They borrow in order to feed their need for a
regular consumer spending 'fix'.
But this addiction is not without its consequences. Every time
you borrow money you forfeit a piece of your life. It means that
your lender owns a bit of you. They own the time that you take
to earn the money to repay the debt every week or every month.
Welcome to life as a human limited company....and your lender
has just become a major shareholder!
Every pound of debt reduces the freedom that you have in your
life. It's a simple equation.
Debt = lack of freedom to spend your time as you decide
Part of your precious, non-renewable life, now has to be devoted
to acquiring enough money to repay your creditors. Your personal
freedom has been curtailed. Every pound of interest paid
represents a waste. Waste of your money. Waste of your effort.
Waste of your time. Waste of your freedom.
WASTE OF YOUR
LIFE!!
3) Rows
What's the most common reason for rows between couples? Work,
children, sex, the house, trivial matters?
Wrong!
The answer is money. Debt is the biggest cause of rows and
relationship problems.
4) Stress
This is the inevitable result of the last two items. You owe
money that you no longer have. You have to repay it with
interest. You have to work every hour available just to make
ends meet. And at the back of your mind is the nagging doubt,
'what if I can't keep up with the repayments?'
Then on top of all that worry, there's the frustration of being
permanently skint, despite the fact they you've never worked
harder in your life.
And all the time your 'better half' is nagging you about never
having any money and the amount of time that you've been
spending at work.
5) Bankruptcy
With all debt, there's always the chance that it will spiral out
of control. One debt can lead to another debt. After you've
borrowed money once, it becomes incredibly easy to do it again,
and again, and again!
It's the easiest thing in the world to say 'Oh I'll just stick
it on my credit card', but it's much harder to repay! Especially
when you've got interest working its mischief against you!
Eventually, it can get to the stage where you can't even afford
to repay the interest, let alone the original amount you
borrowed.
And the end result?
Life is not be as happy and exciting as it should be! And if
that's not a good enough reason to get out of debt, I don't know
what is.
About the author:
by Stuart Laing
Copyright (c)
Get Out Of
Debt.
Are you tired of being in debt? Do you resent the large
repayments every month? Visit
www.icanhelpyougetoutofdebt.com
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