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How Staying Out of Debt Will Change Your Life

From the moment that you turn 18 years old, credit cards, loans and other borrowed funds are dangled in front of you. You may not have a job yet, but creating debt is encouraged by creditors as you learn to navigate these adult waters. However, living a debt-free life has many more opportunities for the individual. Consider how staying out of debt will change your life when you curb those spending habits.


Career Freedom

With a lot of debt comes large bills. You’ll be encouraged to find a job that pays the debt off, but the career itself may not be appealing. Living debt free means that you can pick a career that you’re excited about. As long as there’s a livable wage, you can choose a profession based on interest instead of the salary level. Feel fulfilled by the career, but don’t remain there if those feelings change. You have the freedom to try several different jobs across the years because debt isn’t keeping you harnessed to a particular pay scale.


Lack of Stress


Staying out of debt changes
your life because financial stress isn’t part of your world. There are many other issues in the world to worry about, but your financial health won’t be one of them. Part of living a debt- and stress-free life is maintaining an emergency fund. Issues can infiltrate your day, such as a car accident. Being prepared with a generous emergency fund allows you to pay for items as you recuperate from these emergencies. People who don’t take these situations into consideration will ultimately go into debt because they’ll rely on credit when emergencies arise. Ideally, keep 6 months of income in a savings account for those unusual occurrences.


Lifestyle Goals Attained


Because you aren’t fixated on paying off debt, you can set goals for that next vacation or major investment. Use
virtual bookkeeping services in order to keep track of your everyday spending and saving habits. When you want a certain balance in your accounts by year’s end, the service calculates the proper monthly savings amount for you. Saving up for a 6-month long cruise is a challenge, but it’s possible when you set a goal and remain in your budget. There’s no need to overspend on other items, such as cable television, when you have an unforgettable vacation to look forward to in little time.


Perpetually High Credit Score


Your credit score relies on the responsible use of borrowed funds. Because you don’t carry any debt, the score will often rise as a result. You still need to use credit in order to keep that score high and active, however. Buy an item that requires some use of credit, and pay it off at month’s end. The credit reporting agencies will note this behavior and increase your score. If you ever need to purchase an expensive item, such as a car or property, the score and history will be perfect for low-interest borrowing. Some debt, such as a mortgage, is actually good for your credit rating.


Cash is Real


Your life can change with a debt-free outlook because the concept of cash is real. You aren’t relying on credit with its virtual balance on a computer screen. According to Time Magazine, the cash moving in and out of your wallet and checking account is a true representation of
your net worth. If you don’t have the physical funds, the purchase won’t occur. For people living on credit, the concept of cash is far from tangible. Living in a reality-based financial world will keep you debt free as you save up for that fantastic vacation or coveted, home-entertainment system.

 

If you find yourself in debt at some point, be aware of the balances. Create a game plan to pay them off in a reasonable amount of time. Everyone makes mistakes at some point, but you can achieve a debt-free lifestyle with some attention to detail and spending willpower.

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