This is a post by Ellie Jo about debt.
There is one thing that most people have in common, and it’s debt. Debt is a way of life for most of us, and whether your debt is college debt or mortgage debt, you can bet that many of your friends carry the same one. Many people live under the shadow of debt, but it’s not always something you have to do, especially if you can avoid it.
When it comes to avoiding debt, it’s smart to avoid the bad debt – not so much the good debt! Companies like Boulder Legal Group are able to tell you which debts are good and bad and help you to organize them, too. Below, we’ve put together five of the best reasons that you should avoid the bad debt. Let’s take a closer look!
Reasons to Avoid Debt
- You won’t know what’s going to happen. Whether It’s unemployment or illness, a tornado or a death in the family, there are plenty of things that can happen to ruin your financial stability. You could have everything in your finances squared away but if something goes wrong there is a chance that you won’t be able to cover your debts on top of your mortgage and other bills. You’d have to make sure that you are covered for all of your expenses as much as you are covered for debt payments, too!
- Debt makes things harder. You have your monthly bills and expenses, and when you add debt to it, you will find that your expenses are more expensive than you expected. Putting something on a credit card can cost you more money in the long run, too, as not only do you pay back the money you used, you pay back the interest on top, too.
- It can take forever to pay off. The more debt you have the longer it takes for you to pay it off. You have the best intentions of paying it off faster, but life gets in the way from time to time. If you are only ever paying the interest and not chipping away at the actual debt, you need to start doing that so you can finally get it paid off and not worry about it anymore.
- Debt eats your savings. All of the money that you could be putting away for savings is being eaten up by your debts, and this is going to prevent you from living your best life possible. Instead of putting money toward your retirement or any number of things, you’re putting it into an account that covers your debts. You will spend months and months paying off debt when you do it this way, which is one of the best reasons possible to avoid debt.
- It’s stressful. Debt is stressful and the stress that comes with it will eat away at you over the time you owe money. There is a chance that you will be paying a debt on items that you no longer even own if you’re not careful about it, either. If you are not able to pay your debts, you’re going to end up with money you owe where you can’t manage it.
Next: Find out how to get out of debt quickly.