- February 2014
- Posted By JohnnyG
- 0 Comments
While there are many ways of winning financial freedom, let’s talk a little about how and why people end up in debt in the first place. There are many reason why people get into debt, sometimes it’s because of lack of education about credit. It can also be because of a job loss or other financial burden. It can be because someone has experienced a divorce, or medical problem. Others just tend to overspend, maxing out their credit cards on frivolous items or things they can really live without. While getting into debt can be quick and easy, getting out of it is another matter.
Being in debt can affect you in many ways. Having a poor credit score can impede your chances of getting a loan, you are going to have to pay higher interest rates on insurance, and can prevent you from getting into a good place to live. Being in debt can be stressful, and those that are heavily in debt often suffer from depression. Not only can it affect you, but your family and friends as well.
One of the number one ways to start winning your financial freedom, stop overspending! Many people overspend on things they don’t need, or spend money even when they know it is going to hurt them. Stop going out to eat all the time, to the movies, or to bars. Reduce your clothes shopping, buy generic products instead of designer labels. If you are going to buy anything, you really have to consider whether you really need it or not. If you want to buy that awesome television that all your friends have, but the one you have is perfectly fine, this is a mistake. Instead of using that credit card all the time, use cash or your debit card, since you can only spend what you have.
Another big part of winning financial freedom is setting up a budget and sticking to it. How do you know what you are earning and spending if you don’t have a budget set up? A budget can help you in many ways. It can help you stay on track when it comes to paying bills on time. It gives you are record of where your money is going. A budget is great for helping you pay down your debt, and setting up payments that coincide with your paychecks. It is not enough just to have a budget, you also need to make sure you stick to it, even if it means you have to make sacrifices to pay off bills.
Unfortunately many people have a lot of unsecured debt, especially credit cards. As mentioned earlier, one of the biggest problems, especially with younger people, is that they were never taught about credit and how to use it wisely. Credit isn’t free money, as some may think. It is also extremely easy to get in over your head maxing out a credit card, because all you have to do is sign your name and you can buy just about anything you want. Even if you’re not making huge purchases, even small things can add up quick.
Credit debt reduction is an important part of getting out from under your financial burdens. There are many different companies that offer credit counseling and credit reduction. Some of these are really good, others can be more of a problem than than they’re worth. You really have to shop around for the right company, one that offers the best services, the lowest rates and service fees. It’s not enough for a credit debt reduction company to help you pay off your bills, you need a company that is going to educate you so you don’t get into this situation again, ever. If you are looking for the best company, then go to Debt Consolidation Review, a site that does comparison reviews of the top 8 debt consolidation companies on the market today.